Nick Clegg faces criticism for staging AV referendum at point at which party was likely to plunge to maximum unpopularity
A pre-mortem is already starting at Westminster over the reasons the Yes campaign looks likely to be routed in today's referendum on the alternative vote, with Nick Clegg accepting that voters made anxious by the squeeze on living standards found it difficult to understand why politicians were scrapping over an esoteric issue of voting reform.
The Liberal Democrat leader will face criticism for staging the referendum at the point at which the party was always likely to plunge to maximum unpopularity, and for alienating many progressives by hailing the tight ideological fit between liberalism and Tory modernisers.
Clegg's aides argued that the refusal to highlight differences between the coalition partners was necessary to reassure voters that coalitions, a new phenomenon in British politics, can work.
Clegg has not given up hope that the referendum result may yet still confound predictions. And he defended its timing this week, telling the Guardian: "I am sure gallons of ink and great forests will be cut down to produce the newsprint where people will be wise with hindsight about when referendums should have been timed. We were very clear as Liberal Democrats that one of the things people wanted to press ahead with was not only repairing the economy but the other crisis which burst into people's consciousness – which is the expenses scandal and the feeling that politics is simply discredited.
"I don't think you can change the electoral system even modestly, and this is a modest change, when you have very serious dissent between the political parties in the way we do. It is best to take it out of the hands of the politicians and put it into the hands of voters."
But, in philosophical mode, he accepted it had been difficult to get voters engaged with political reform. "People are worried about jobs, their children's education, their basic securities of life, the cost of petrol, and in that context asking people to focus on what is clearly a rather esoteric issue, and then watch a bunch of politicians tear strips off each other about how they elect MPs in 2015 – well that is not on the top of people's shopping list of concerns."
It is expected that even though he has been generous to Ed Miliband for taking a stand for AV in recent weeks, Clegg will partly blame the Labour leader for being unable to win his party over to a more unified view on electoral reform.
Some of Clegg's closest allies will go public and cathartically vent their fury at the way David Cameron let the No campaign assault Clegg's political credibility. Others who disliked the No campaign profoundly will criticise Chris Huhne, the energy secretary, for eating up valuable time attacking the Conservatives. Huhne and Vince Cable were genuinely angry at the No campaign, and belatedly trying to generate a last-minute anti-Tory mood among Labour voters.
Huhne denies he is lining himself up for a third party leadership bid, but he is one of many saying the consequence of today's likely reverses, not just in the referendum, is that the party must become more distinctive.
Clegg has already used his Guardian interview to signal a new phase, saying it will not be a bad thing if the party is more articulate about its differences with its coalition partner. But he is cautious about how far this unlocking strategy can be taken. "Do I think the uncompromising negotiation – which happens every week – needs to happen as a running public commentary? No, not all of it, but probably some of it."
He knows that the party will make a serious miscalculation if it thinks on the back of disastrous election results, and the rejection of its century-long dream of electoral reform, it can start bossing Cameron around. A bit of humility will be required. Cameron, for the moment, is the undisputed master in this coalition. The greater danger in some Lib Dem eyes is that it will be the Tories who will collapse the coalition, and spring an early election that would see the Lib Dems crushed.
Clegg himself is passionate, reminding the party of the current limits of its power. "I lead a party of 57 MPs, in a parliament of 650 and people who somehow accuse me of having made U-turns seem to think I could behave as if I won a landslide. I did not. I wish I did. I wish Cleggmania transformed itself into an outright Liberal Democrat victory. It did not. We actually lost MPs. We came third. We have to make painful, unpopular compromises."
The early signs are that pro-coalition Tories such as Francis Maude, the Cabinet Office minister, will go out of their way to offer reconciliation. One Lib Dem ally of Clegg said there was an 85% chance the coalition will run the full course. Clegg is signalling he will press hard to change the health reforms, an issue on which he is pushing on an open door with Cameron.
He denies the loss of electoral reform means his wider constitutional reform project is dead. "We will carry on trying to thrash out a deal on party funding, which is an area I care about passionately. I think it is the next great scandal waiting to happen, it is still too opaque and obscure, too many parties are in the pockets of vested interests. House of Lords reform, discussed for over a century, we have got to try and make progress finally in this parliament. The power of recall of MPs … all these things will proceed."
Clegg is not expecting any internal challenge to his political authority, but if the economy is still flatlining in two years, he could face calls from senior cabinet figures to come up with a plan B. It will be a relief for Clegg that the two serious economists on his frontbench, Huhne and Cable,are bound in with the tough deficit reduction plan proposed by George Osborne. If the economy is not improving by 2013-14, it will not just be Clegg in trouble. The whole coalition will be on the rocks.