No power-sharing deals unless constitution is reformed, warns Clegg

Clegg prepares to confront his party after facing his most uncomfortable week as leader (PA)

Nick Clegg, the Liberal Democrat leader, has demanded a fundamental "redesign" of the British constitution as a precondition of any future power-sharing deal with Labour or the Conservatives.

Mr Clegg used his first major conference speech as party leader to insist that electoral reform would have to be accompanied by a raft of other changes if the Liberal Democrats were to talk to their mainstream rivals in the event of a hung parliament. He broke the long-standing taboo on discussion of post-election tactics to make it clear that he would negotiate with either the Conservatives or Labour, but insisted that he would not join the Cabinet as a mere "annex" to either.

Mr Clegg said he wanted to establish a constitutional convention of the public to replace Britain's centuries-old constitution. He told delegates in Liverpool: "This is the end of the line for politics as usual. If we want a political system that works for the future, we need to start again, from scratch.

"I am not just talking about electoral reform. A change in our voting system is a vital part of what we need, but it isn't enough."

He made it clear that he would enter a power-sharing deal on his own terms. He said: "Will I ever join a Conservative government? No. Will I ever join a Labour government? No. I will never allow the Liberal Democrats to be a mere annex to another party's agenda. But am I interested in building a new type of government? Yes, based on pluralism instead of one-party rule? Yes, a new system that empowers people not parties."

Allies insisted they had to maintain "equal distance" between Labour and the Tories to maximise their bargaining power in the event of a hung parliament and wanted a huge change in the way power was exercised before they would deal with their opponents.

In another shift, Mr Clegg moved away from the party's tax-neutral position to argue that it should aim to cut taxation. He said: "We must never stop thinking about how we make taxes fairer, greener and if possible lower. If, before the general election, we find we can deliver our objectives with money to spare, we shouldn't look for new ways to spend it. We should look for new ways to hand it back, especially to those who need it most."

Aides argued that political funding reform and decentralising control of public services such as the NHS would be important parts of a new constitution.

They insisted that the party had not drawn up a "shopping list" for a coalition deal, but said they would press the other two parties hard to achieve a new form of "pluralistic" government in the event of a hung parliament.

Mr Clegg's chief of staff, Danny Alexander, made it clear other parties would have to clear a high hurdle if they wanted to deal with the Liberal Democrats. He told the BBC: "What he is saying is that we are an independent party, we are a party that has got its own clear agenda ... we're the anti-establishment party."

Mr Clegg called for a new £25,000 limit on donations to political parties and said voters should have the right to sack MPs suspended for serious misconduct and trigger a by-election.

He shrugged off last week's rebellion over Europe, which saw the resignation of three members of his shadow cabinet team. But he made it clear that the party had to be "united and disciplined" to make progress.

Mr Clegg pledged more aggressive campaigning in Westminster like the walkout by MPs last weekend they were denied the chance to debate their proposal for a referendum on Britain's membership of the European Union.

He told delegates: "I'm not shy about doing whatever it takes. If it means walking out of Parliament when the big parties collude against us, I say fine." He added: "You can expect much more of that from me."