'THE elections were bad, very bad," noted a senior and seasoned Liberal Democrat, "but the Coalition is still the only game in town." These are dark days for the LibDems, who earlier this month lost more than 300 seats in the local elections and who are languishing in the opinion polls at a measly 7% – on a par with UKIP.

Lord Oakeshott, the LibDem former Treasury spokesman, warned what another "hammering" would mean.

He said: "What matters is whether we can fight the next election as a nationwide, powerful, independent force, and if we have another year like this, we won't be able to."

The fear is that the grassroots supporters and activists will become so disillusioned with the Coalition's all-consuming austerity drive – and its failure to engineer growth – that, come the next election, the party will simply not have the boots on the ground to contest seats effectively in some parts of the UK (such as Scotland, where the party's electoral fortunes are currently at a particularly low ebb).

There are now mutterings at Westminster that some senior figures believe the party might even have to withdraw from government early to avoid a wipeout at the next general election.

The likes of Charles Kennedy, Simon Hughes and Tim Farron have all been holding their noses (and tongues) while the likes of Nick Clegg, Danny Alexander and David Laws continue proudly to sing the Coalition tune. But tensions over the LibDem-Tory programme have surfaced elsewhere, with some right-wing Conservatives openly voicing opposition to David Cameron and bemoaning how the LibDem tail is wagging the Tory dog.

Last week, David Davies, the Welsh right-wing Conservative MP, apologised to constituents who felt "let down" by the Coalition and warned that his party's leader would not remain Prime Minister for long unless he "changed tack".

As the left-right tensions create friction, the hearts and hopes of some social democrat LibDems have been raised by the anti-austerity mood sweeping across continental Europe.

They believe the victory of François Hollande to become French president could at long last provide the spur for Coalition ministers to begin to temper the tough Tory cuts rhetoric with some progressive commonsense.

Indeed, last week at a tractor factory in Essex we saw both the PM and Deputy PM nuancing coalition policy. Cameron redefined austerity as "efficiency" and told his granite-chinned shopfloor audience: "If you actually look at what President Hollande is suggesting in France, actually his programme for getting rid of his budget deficit is actually on a pathway with ours."

He added: "It's a bit of a myth to suggest that somehow there's some people in Europe that are going to spend a lot more money and those of us who realise we have to deal with our debt and our deficit."

Clegg was equally comradely towards France's Socialist leader, noting: "President Hollande has made it very clear he wants to place more emphasis on growth.

"I don't think anyone would disagree with someone saying they want to grow their economy. That's exactly what we are about."

Indeed, the Coalition leadership, having repeated the gloomy mantra of austerity for so long, now appears more keen to adopt the more upbeat message of growth.

Clegg told the tractormakers of Basildon: "Austerity alone does not create growth. It is a necessary but not sufficient step.

"But the end – what we are absolutely dedicated towards – is creating jobs, creating prosperity, creating investment, creating opportunity, creating optimism and hope in our country."

Yet will words be enough?

As the next election approaches, there will be a growing mood for the Liberal Democrats and the Conservatives to put clear political water between themselves; it will be most noticeable during the party-conference season.

Indeed, there might be a rapprochement of sorts between Labour and Lib Dem figures, looking ahead to the possibility of another Westminster coalition government post-2015 – but this time a progressive partnership.

Yet while some Tories and Lib Dems complain that the coalition is increasingly not working for them, the leaderships will seek to maintain the political equilibrium at all costs and keep the partnership together right to the end.

The senior and seasoned Lib Dem quoted earlier is well aware of the political reality that while there might be siren voices within Lib Dem ranks – and indeed within Tory ones – trying to lure the party away, any premature collapse of the coalition would spell disaster for England's third party.

The only game in town is to show that coalition politics works and to hope that by 2015 the economy will have turned around sufficiently enough for voters to look back and, despite their previous reservations, conclude that all the austerity was indeed worth it and express their gratitude at the ballot box accordingly.

If they don't, then Nick Clegg and his colleagues might well have just overseen a major cull of Liberal Democrat MPs and thrown their party back to where it was in the 1970s.

'What we are dedicated towards is creating jobs'

BY MICHAEL SETTLE

UK POLITICAL EDITOR