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Clegg has gambled his party's future on another hung parliament

His decision to remake the Lib Dems as a centrist "party of government", rather than a centre-left outfit, could prove ruinous if the next election doesn't produce the right result.

Nick Clegg delivers his speech at the Liberal Democrat conference in Glasgow. Photograph: Getty Images.

This was the speech that many thought Nick Clegg would never deliver. Back in 2010, when millions of Lib Dem voters defected en masse to Labour, Westminster sages predicted that by 2013 he would be in retreat from British politics, preparing for a return to Brussels as the UK's new EU commissioner. But today Clegg stood before his party as a politician reborn, buoyed by the Eastleigh by-election, the economic recovery and the prospect of another hung parliament.

Of the six conference speeches Clegg has given as leader, this was by some distance the best. It was by turns witty, moving and self-deprecating. In a clarion call to Labour supporters in Tory-Lib Dem marginals to come home to his party, Clegg reminded us just how much worse a majority Conservative government would have been: "Inheritance tax cuts for millionaires - no. Bringing back O’ levels and a two-tier education system - no. Profit-making in schools – no. New childcare ratios – no. Firing workers at will, without any reasons given – no, absolutely not. Regional pay penalising public sector workers in the north - no. Scrapping housing benefit for young people – no. No to ditching the Human Rights Act. No to weakening the protections in the Equalities Act. No to closing down the debate on Trident." He pointed out that it was David Cameron who told him during the 2010 leaders' debate that the country couldn't afford a personal tax allowance of £10,000 and smartly took ownership of equal marriage, the coalition's greatest achievement and one that would have been impossible without Lib Dem support. And he reaffirmed his party's status as the surest defenders of civil liberties, the greatest champions of Europe and the most committed environmentalists.

The announcement of free school meals for all infant pupils was a masterstroke, drawing some of the sting from Labour's "cost of living" attack and cheering his party's universalist wing. How foolish of the Tories to press ahead with their discriminatory tax breaks for marriage, giving the lie to their claim that they wish to support all and any "hardworking families".

But there were two problems with Clegg's speech that he evaded, rather than confronted. The first, if we are entering a new era of hung politics, is the question of whether the Lib Dems view Labour or the Tories as their natural coalition partner. Clegg sought to present himself as agnostic between the two but the polls repeatedly show that it is the former that his party's activists and voters are drawn towards. In the case of Clegg, the reverse is the case. Today, he declared that "I don’t look at Ed Miliband and David Cameron and ask myself who I’d be most comfortable with, as if I was buying a new sofa." But his staff routinely brief that they crave a renewal of vows with Cameron. If the next election results in another hung parliament but both Labour and the Tories win enough seats to form a majority government with Lib Dem support his party risks a damaging schism. Jeremy Browne and David Laws will look towards Cameron, Vince Cable and Tim Farron to Miliband.

The second problem is that Clegg's positioning of the Lib Dems as a "party of government" is premised on the belief that another hung parliament is likely in 2015. It certainly appears more probable than it did last year, but recall that while even a seven-point lead wasn't enough for the Tories to secure a majority, a lead of just one-point will be enough for Labour. Clegg confidently ended: "Our place is in Government again." But if Miliband leads Labour into government after 2015, he will be left as the head of a marginalised party, bereft of members and seats (even now, the Lib Dems will struggle to hold onto more than 30), and discredited for a generation by collusion with the party that was for so long its greatest foe.

The Lib Dems' new raison d'être is to serve as a centrist party that takes office in order to ameliorate the extremes of Labour and the Tories. To this end, Clegg has been prepared to trade principle for power. For every one of the Tory policies that he prevented, one can name others that he enabled: the immigration cap, NHS privatisation, £9,000 tuition fees, the VAT rise, the abolition of the 50p tax rate, the benefit cap and the bedroom tax. In the trade-off between principle and power, the danger is that Lib Dems will lose both.