I have a confession to make: I don't hate the Liberal Democrats. Ever since my appearance on BBC1's Question Time the day after the coalition was formed last May, when I mocked the new Prime Minister and Deputy Prime Minister as "TweedleCam and TweedleClegg", Lib Dems have assumed that I am an implacable and vitriolic foe of their party. I'm not.

It's true that the Lib Dem leadership betrayed the party's progressive, liberal and social-democratic ideals - not to mention its centre-left voters - when Nick Clegg and his negotiating team helped to put a Conservative government in power and voted through a regressive "austerity Budget". It's also true that there were viable alternatives to a full-blown coalition with the Conservatives: if not a "rainbow" alliance between Labour, the Lib Dems and the Scottish and Welsh nationalists, then a minority Tory government with only "supply and confidence" support from the Liberal Democrats.

The Lib Dems' decision to forge an alliance with the Tories has exacerbated Labour's worst tribalist tendencies. Lib Dem-baiting has become a popular but dangerous sport inside the party. What was perhaps the most misjudged statement of Ed Miliband's leadership campaign came while he was on a tour of Scottish constituencies last August. "We have to make the Lib Dems an endangered species and then extinct," he told cheering supporters in Kilmarnock. Wisely, the Labour leader has since performed a U-turn, inviting Lib Dems to contribute to Labour policy discussions and even hinting that he could one day work with Clegg "if he were to be a sort of sinner repenteth".

Partners for peace

But Muammar Gaddafi is more popular in Labour circles these days than the Deputy Prime Minister. Several leading Labour figures justify their opposition to the Alternative Vote (AV) on the grounds that a victory for AV would embolden Clegg and strengthen the Con-Lib coalition. Nothing could be further from the truth: a defeat for AV would force the Lib Dems to do a deal with the Tories ahead of the 2015 general election, simply in order to survive under first-past-the-post.

AV aside, there are two other myths that need to be exploded. The first is that there isn't any common ground or common cause to be found with the Liberal Democrats. Labour moralists would do well to remember that the Lib Dems took positions well to the left of New Labour on a range of issues - from opposition to the invasion of Iraq and the introduction of ID cards to an amnesty for illegal migrants and an end to child detention. Despite misgivings about Clegg, it is worth noting a speech that the Deputy PM made in Luton on 3 March, praising multiculturalism and taking
a deliberate dig at David Cameron's decision to ban Conservative ministers from engaging with "Islamists". "You don't win a fight by leaving the ring. You get in and win," Clegg said. Progressives and pluralists should welcome such interventions.

The second myth is that Liberal Democrats aren't interested in finding common ground with Labour. To borrow a phrase from the Middle East, there are plenty of "partners for peace" inside the third party. In the Commons, there are Charles Kennedy, the former party leader, and John Leech, the Manchester Withington MP, both of whom abstained on the decision to go into the coalition and then voted against the trebling of university tuition fees. Nor should we forget Simon Hughes, the party's anguished deputy leader. He was criticised for accepting the job of "access tsar" on higher education but it was Hughes who led the backbench opposition to Iain Duncan Smith's draconian proposal for a 10 per cent cut in housing benefit for the long-term unemployed, thereby forcing the Work and Pensions Secretary into a little-noticed U-turn on this issue last month - a small but vital victory for progressives.

In the Lords, potential allies include Shirley Williams, who has spoken in recent days of her "moral duty" to challenge the Health Secretary, Andrew Lansley, on his plans to "dismember" the NHS. There's also Matthew Oakeshott, the party's former Treasury spokesman, who was forced to step down last month after describing the coalition's long-awaited Project Merlin deal with the banks - on bonuses and lending - as "pitiful". He tells me: "Lib Dem co-operation with Labour is growing by the day." And the peer Jenny Tonge was recently overheard saying in the Lords: "Why would I defect? It's my party, too. I'm not just going to leave it to them" - "them" being the neoliberal, small-state Orange Book faction now in control of the party of Beveridge and Keynes.

Huhne the untarnished

At a regional level, there's Richard Kemp, leader of the Lib Dems in local government, who told me in November that he was "cynical" about the "big society" and condemned the "front-loaded" cuts to local council spending. Among activists, there's Richard Grayson, the party's former policy director, who accepted an offer from Miliband in December to work as a "point man" for Lib Dems who want to offer their input to the various Labour policy commissions.

Yet the big question is whether or not there is a cabinet-level Lib Dem that Labour could do business with in future. One name being mentioned is Chris Huhne, the Energy Secretary and former member of the SDP. If Clegg were run over by the proverbial bus, Huhne would be "the front-runner" to take over as party leader, says a Lib Dem frontbencher. As a cabinet minister, he might be tainted in Labour eyes but he has been lucky - unlike Vince Cable, who as Business Secretary has had to defend the tuition fees policy, and Danny Alexander, who as chief secretary to the Treasury has had to defend spending cuts. Huhne has the less controversial climate change portfolio, and because of the climate talks in Cancún last December, he was out of the country during the Commons vote on tuition fees. "He was very keen not to fly back," says a friend.

Whether or not Huhne emerges as a challenger to Clegg, the wider point still stands: the Lib Dems cannot and should not be defined by Clegg, Alexander or David Laws. To pretend that the party is personified by its free-market Orange Book clique is as foolish as pretending that Labour in the late 1990s was nothing more than Tony Blair and Peter Mandelson. "We're not parti pris for Nick Clegg," says a senior Liberal Democrat in the social-democratic wing of the party. "The natural home for most Lib Dems is on the left."