What should be Labour’s long-term strategy towards the Liberal Democrats: to extinguish them as crypto-Tory traitors or tempt them back into some new progressive alliance?

A significant strain of Labour opinion hates the third party’s opportunism with true vitriol. Nick Clegg’s party is already haemorrhaging support and face disastrous results in next year’s May elections once the coalition’s cuts begin to bite. Labour activists are itching to destroy them as the ‘closet Tories that they really are’.

I understand where people are coming from. The Liberal Democrats have made a disastrous U-turn by calling for early cuts this year. But rightful anger at their economics must not lead on our part to a massive strategic misjudgement on the politics.

A semi-permanent coalition of Conservatives and Liberal Democrats is something we should fear, not wish for. It detoxifies the Tory brand. It persuades voters that there is no practical alternative to the course of action the coalition is following ‘in the national interest’.

Instead, Labour should develop a new strategy for embracing Clegg and his party. We must prevent David Cameron pulling off what Baldwin achieved in the 1930s. The 1929 Labour government had proved incompetent in the face of global crisis. The national government was presented as the only hope for the country and were on course to win a third term before the second world war began

This nightmare is more likely, not less, if next year’s AV referendum results in a no vote. To manoeuvre for this on the basis that it would cause Clegg maximum distress, would be an extraordinary piece of opportunism: of the three main party manifestos, only Labour offered a referendum on AV. But it would also have the reverse political effects to what some think.

With the defeat of AV, the Liberal Democrats would lose the main benefit they sought from the Tory coalition. But if Labour proves complicit, we would once again have proved an unreliable partner on constitutional reform. An AV defeat would make Liberal Democrat MPs, anxious about holding their seats, more dependent on the coalition’s success not less.

Labour has to understand that AV provides Liberal Democrat MPs with the best coalition exit option. After the abject failure of the much-hyped Liberal Democrat assault on Labour’s heartlands, two-thirds of their MPs – and four out of five of those with a serious challenger – faces a Tory in second place. AV offers the prospect of Labour second preferences to keep the Tory out. Without AV, the promise of a Tory ‘coupon’ becomes much more attractive as the price of a continuation of the coalition’s ‘unfinished business’ in the next parliament.

Labour’s leadership candidates hover uneasily between talk of Lib Dem extinction and embrace. Ed Miliband hints at hope of a breakaway in which leading figures like Vince Cable, Charles Kennedy and Shirley Williams would do an ‘SDP in reverse’. Liberal grandees like Paddy Ashdown, Menzies Campbell and David Steel, fierce opponents of the Tories all their lives, could follow suit. While this year’s Liberal Democrat conference will probably reveal only flurries of dissent, next year’s could be different.

Individual defections to Labour will occur, but Labour has to calculate that the Liberal Democrats have shown a hard-headed capacity to stick together through successive defeats and leadership crises. However, at some stage this parliament Clegg is likely to face a very tough choice: either to pull his party out of the coalition to maintain Liberal Democrat unity, or to live with a split on the assumption that sufficient of his MPs would stick with the coalition on the basis of a promise from Cameron that no Conservative candidate will stand against them at the next election.

Labour can only ‘wait and see’. But in the meantime the principled (as well as correct tactical) course is not to abandon our support for AV. Rather we should renew Labour’s programme on a basis that could embrace the Liberal Democrats – either in whole or in part – as future progressive partners.