Is Clegg the man leading Lib Dems into oblivion?

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Nick Clegg will this week attempt to reassure his own MPs amid growing anxiety over the political price of sharing power with the Conservatives.

Only two months after entering government, the Deputy Prime Minister is beset by colleagues concerned that his support for the Tories may cause irreparable damage to his party.

Mr Clegg will take his 57 MPs on an "away day" to rally support and urge them to remain loyal to a programme of government which their party has already endorsed.

The call for unity comes after a series of internal protests at coalition policies spilled into outright defiance of the leadership. A handful of Lib Dem backbenchers have already attempted to frustrate the Budget proposal to increase VAT to 20 per cent.

Now, almost a dozen Lib Dem MPs have gone public with their opposition to the Education Secretary Michael Gove's decision to scrap more than 700 school building schemes.

The shock caused by the impact of the cuts programme at the heart of their communities has led many to ask whether Mr Clegg has made a mistake in tethering his party to a Tory Party intent on implementing a severe austerity programme.

But it is Mr Clegg's announcement last week, that Britain will get a referendum on electoral reform, that has raised profound questions over whether the leader extracted enough concessions in exchange for his support for David Cameron – and whether the Lib Dems could bear the future consequences of their involvement in the coalition.

The Alternative Vote (AV) system proposed, would change the way individual MPs are elected, not the way seats in Parliament are shared, and thus does not amount to the wide-ranging electoral reform for which Mr Clegg and his party have campaigned. It is, therefore, a colossal gamble.

"I am not enjoying government," one senior Lib Dem MP said last night. "We are being asked to defend some ugly policies but it is hard to say what we have got to show for it in return."

The Lib Dem leadership point to the number of their MPs given senior posts in government, and the wider constitutional reform package, spearheaded by Mr Clegg, as evidence of the benefits of power-sharing. The referendum is seen as key to the process.

Mr Clegg yesterday hinted at a longer-term place in government for his party, declaring that the Lib Dem-Conservative coalition marks "a permanent move that breaks the duopoly of the old parties for good".

But Richard Grayson, vice-chair of the Lib Dems' federal policy committee, said the position of a centre-right grouping at the top of the party – and now in Cabinet – was causing unease within the party at large. He said: "We have a leadership that tends to see the state as a problem, rather than the means of solving problems. The coalition has allowed the [Lib Dem] leadership to pursue its zeal for cutting public spending."

"In the long run I see only tears for the Lib Dems," said Professor George Jones, of the London School of Economics. "The party will split. Some will be absorbed into Cameron's progressive Cons party. Some will move over to Labour. Others will be in a small independent Lib Dem party. Their only hope is electoral reform, if they want to be more than a party of protest."