The Deputy Prime Minister indicated in a radio interview earlier this week that he would be ready to take the LibDems into coalition with Labour, in what was widely seen as an effort to smooth the way for talks in the event of a hung parliament after next year's general election.
His comments followed the apparent offer of an olive branch last month from Mr Balls, when he said he had had a "friendly and warm" conversation with the LibDem leader and "understood totally" Mr Clegg's decision to form a Government with the Tories in 2010.
But in a new interview with Progress magazine, the shadow chancellor took a decidedly less amenable tone, insisting that he would not let the LibDems "off the hook" for their actions in Government.
Although he acknowledged that Labour would have to "deal with the result that the electorate throw up" in the May 2015 poll, Mr Balls added: "None of us want to be in coalition with the Liberal Democrats, partly because it's hard to know what's more unpopular at the moment: the Liberal Democrats or the idea of a coalition government."
Speaking before the broadcast of Mr Clegg's interview, Mr Balls was scathing about the LibDems' record: "'I look at what the Liberal Democrats have done the past two or three years - these guys have not restrained the Conservatives; they have in many ways amplified and encouraged the Conservatives in things that they've done.
"I'm afraid that the relish with which some of their spokespeople talk about some of the difficult decisions they've had to introduce - the relish with which they talk about the bedroom tax - I'm not going to let them off the hook.
"It's one thing to break your promises in a manifesto to get into power, it's another to do that on the backs of the poor and the most disadvantaged.
" That's what they did and I don't think people are going to forget that."