Hughes warns Campbell that he 'has to do better'

The first cracks began to show in the support for Sir Menzies Campbell from his most senior colleagues last night with a warning by Simon Hughes, the Liberal Democrat president, that the party leader "has to do better".

Mr Hughes said that, although Sir Menzies had "improved considerably" since taking the helm 18 months ago, he still needed to raise his performance. He also delivered what may be seen as a veiled threat, by saying the leadership was "always an issue".

His remarks will dismay the Liberal Democrat leader who is mounting a fightback today at a Liberal Democrat conference by calling on the party to focus its attack on the poor settlement for local government which could lead to increases of at least 5 per cent in council tax bills.

Allies of Sir Menzies said he was being destabilised by a small group of people. "It's just noises off," said one leadership source. "It's a small number of people."

However, there are growing suspicions at Westminster that the rumblings of discontent are part of a plan by supporters of other potential leadership candidates to persuade Sir Menzies, 66, to stand down.

The Prime Minister's decision to delay the general election until 2009 fuelled speculation that Sir Menzies could be persuaded to step down to give a younger leader a chance to lift the party. The pressure was increased by Ipsos-MORI research for The Sun that put the party's support at just 11 per cent – compared with nearly 23 per cent at the last general election. According to Electoral Calculus, a website which translates party share of the votes into seats, this would wipe out the Liberal Democrats at the next election.

Public jockeying between two of the party's rising stars – the environment spokesman, Chris Huhne, and the home affairs spokesman, Nick Clegg – dominated last month's conference in Brighton.

In an interview for GMTV's Sunday programme, Mr Hughes signalled Sir Menzies was still on trial, saying: "We live in a presidential system, and therefore the leader has to continually do well and better." Asked if he meant Sir Menzies had to do better, Mr Hughes replied: "Well, of course."

He added: "The leader obviously has to do better ... Now, he will do that, I'm confident he'll do that."