Clegg may yet plump for Cameron

Inside Lib Dem HQ, there is talk of the party providing Cameron with "supply and confidence" in the

Much has been made of the split within the Labour cabinet between the pluralists and the tribalists. The former by far outnumber the latter, and include Alan Johnson, David Miliband, John Denham, Tessa Jowell, Ben Bradshaw and Andrew Adonis. The tribalists can count on Nick Brown, Jack Straw, Ed Balls and perhaps Alistair Darling - who, on 16 April, dismissed the Lib Dems as "loopy".

Labour's tribalism is often exemplified by John Prescott, who told the New Statesman in a recent interview that when Tony Blair once asked him whether Paddy Ashdown could join the government, the then deputy prime minister replied: "If he walks in that door, I'm out that door. No discussion."

This split between tribalists and pluralists may be as exaggerated as it is outdated. "There are no pluralists or tribalists any more," one cabinet minister tells me. "We're all realists now." With most polls showing that the party has slumped to third place for the first time in three decades, Labour strategists privately acknowledge what this magazine has long recognised: that they can no longer govern alone. "You can't get more tribal than the party in Scotland and they sat in government with the Lib Dems for eight years," says one. "It's doable."

Would the Labour leadership concede the Home Office to Nick Clegg and the Treasury to Vince Cable, as it has been suggested? The cabinet minister says that he "can't think of a single cabinet colleague who wouldn't be happy to sit around the cabinet table with Nick Clegg and Vince Cable". Even Ed Balls has privately conceded to friends that a deal with the Lib Dems would be preferable to a Cameron premiership.

There are, however, two potential obstacles to a Lib-Lab pact. The first is Gordon Brown. On the very first day of the campaign, the Lib Dem home affairs spokesman, Chris Huhne, hinted that his party might demand Labour get rid of Brown as its leader as the price of working with them in a hung parliament. "There clearly are historical precedents," said Huhne, mentioning how there have been "examples of parties that have said that they won't serve unless there is a different prime minister".

There has since been speculation that the likes of Peter Mandelson and Jack Straw might ask Gordon Brown to step aside after the election - to smooth the path to a power-sharing pact with Clegg (who does not hide his dislike for the Prime Minister). David Miliband and Alan Johnson's names have been touted as acceptable alternatives.

“Spurious nonsense," says one source close to the PM. Brown is the leader who has seen off three coup attempts and his allies are adamant that he will stay on in a hung parliament. But what if the Lib Dems were to insist? In a recent interview, Alan Johnson emphatically rejected this idea. They're not picking our leader," said the Home Secretary. "If we get to that position [of a hung parliament], Gordon would have done a huge amount to bring us back from the brink . . . [He] could stay as long as he wanted." This verdict is echoed by another cabinet minister I spoke to. "If David Cameron doesn't win a majority, it would be seen as a disastrous verdict on his leadership," he said. "There'd be no appetite in [the Labour] party for leadership change - and it would be impossible for the Lib Dems to demand."

Blue man group

The truth is the Lib Dems have no intention of helping to foist another unelected prime minister on a distrustful electorate. Can you imagine the public anger if, after a four-week election campaign featuring three televised leaders' debates, David Miliband were to emerge from the shadows as prime minister? The Lib Dems would soon lose their status as plucky "outsiders" if they were seen to be complicit in that particular back-room deal.

On the contrary, the word inside the Lib Dems' Cowley Street HQ in London is that there is an advantage in having Clegg serve in a government under Brown: he would be seen as the fresher, more distinctive and daring of the two party leaders.

The second suggested obstacle is the Conservative Party. What if Clegg decides to ally with Cameron, especially if the latter, as expected, wins the largest share of the vote? The Lib Dem leader is more right-of-centre than his three predecessors and rumours abound about his membership of the Cambridge University Conservative Association. He has surrounded himself with members of the so-called Orange Book, free-market wing of the party - including the education spokesman David Laws, who was once offered a seat in the Tory shadow cabinet by George Osborne.

Confidence trick

However, most Lib Dem MPs, as well as activists, members and voters (who, according to a recent ComRes survey, prefer Brown to Cameron) remain opposed to any coalition with the Conservatives. On numerous issues - from the timing of deficit reduction to relations with Europe - the Lib Dems, as usual, have more in common with Labour than with Cameron's Conservatives.

Above all else, there is electoral reform: the deal-breaker. For the third party, electoral reform has long been considered a "hygiene" issue - just as you don't eat at restaurants where the kitchen is dirty, you don't join coalitions without reform of the first-past-the-post system. Senior Labour ministers are now said to be considering widening the options on the proposed referendum on electoral reform to include a more proportional alternative to the Alternative Vote.

But what if the Lib Dems were to avoid a formal coalition with both Labour and the Conservatives? Inside Cowley Street, there is talk about the possibility of the Lib Dems providing Cameron with "supply and confidence" in the event of a hung parliament. They would pledge to support a Tory Budget and side with a Conservative minority government on any votes of confidence. It would give Clegg an effective veto over Cameron's non-Budget-related, domestic policy proposals.

But it would also give the Tories the breathing space to regroup, govern for a short space of time and then call another, snap election, in which they would expect to win an overall majority. Labour, in the midst of a potentially bitter leadership contest, and on the edge of bankruptcy, would be unable to put up much of a fight in a second general election.