Andrew Grice: The Coalition will never be the same again after this divisive campaign

Inside Westminster

(GETTY IMAGES)

Despite the hype about love-ins between David Cameron and Nick Clegg and a marriage between their two parties after the Coalition was formed a year ago, it will have an unhappy anniversary on Wednesday.

The day before, there will be an attempt to portray the Cabinet's weekly meeting as business as usual. But the atmosphere will be decidedly chilly. "There won't be a cake in the middle of the table with one candle on it," one minister quipped yesterday. "People might think the other party had put a bomb in it."

Mr Clegg will still be licking his wounds after his double defeat in the referendum on the voting system and in the English council elections. The bruises that will hurt most will be those left by the personal attacks on him by the Tory-led No campaign against the alternative vote (AV), which won a resounding victory last night.

In the council elections, the Liberal Democrats were cast in the role of the Tories' human shields. Remarkably, the Teflon-like Mr Cameron escaped without a scratch. That only made Mr Clegg's pain more acute, the task of explaining the meltdown to his party much harder.

Only a few weeks ago, Cameron and Clegg aides wondered whether to mark the Coalition's anniversary with another gay wedding-style press conference in the Downing Street garden like the one a year ago. It would look ridiculous now and the idea has been binned. Instead, the Prime Minister and his deputy will probably make a joint visit designed to show they are focused on creating growth and the jobs of the future.

Although one of them was always going to be the loser in the referendum, the No camp's attacks on Mr Clegg's "broken promises" will change the atmospherics of the Coalition permanently.

The Liberal Democrat leader has no option but to bow to the likes of Vince Cable and Chris Huhne, who have been straining at the leash to assert the party's separate identity from the Tories. Mr Clegg argued that maintaining a united front with the Tories in the Government's first year was vital because showing that "coalition works" is in his party's long-term interests. But its double disaster on Thursday shows the strategy has had disastrous consequences for its short-term prospects.

In the past year, the Liberal Democrats have punched above the weight of a junior coalition partner with only 57 seats, compared to the Tories' 306. Real gains that would not have happened under a Tory government included steps towards a £10,000-a-year personal tax allowance and a pupil premium for children from poor families. But the gains were overshadowed by a poorly-presented U-turn over university tuition fees.

With hindsight, Mr Clegg's allies admitted yesterday, the "differentiation strategy" should have begun earlier. From now on, he and his party will air their differences with the Tories in public more often. The Dave and Nick love-fest was always a caricature and their relationship was always more business-like than personal. But Mr Clegg's reluctance to do the dirty washing in public meant that the image stuck.

Now he will have to correct it. But it will be a difficult balancing act. "We can't go from best mates to mortal enemies overnight," one Clegg ally said.

What will showing a separate identity mean in practice?

Liberal Democrat ministers will not break ranks with the Tories over the pace and scale of the spending cuts, as some of their MPs and activists would wish. That would jeopardise the only strategy Mr Clegg has left – showing that "coalition works" until the general election. And wobbling over the cuts would scupper Liberal Democrat hopes of using their precious spell in power to cure a fatal weakness – their lack of economic credibility.

However, Mr Clegg's party will highlight its distinctive tax policies, and demand a tougher crackdown on the banks and a more interventionist industrial policy. More widely, it will be bolder in showing its true colours and, if necessary, will rock the Coalition boat to get its way.

The Prime Minister may cut his junior partner a little slack but there is no mistaking who now has the upper hand in the relationship. Mr Cameron has looked the part since the moment he crossed the Downing Street threshold. This weekend, he looks like a man who could easily lead his party to outright victory at the next general election.

The Prime Minister has outflanked and outwitted his deputy, whose approach to the AV referendum now looks naive. Mr Clegg took Mr Cameron at his word when he said he would take a low-key role in a campaign that would avoid personal attacks. He will be more wary about trusting Mr Cameron in future.

Mr Clegg had a reason for his approach. Last autumn, Mr Cameron seemed remarkably relaxed about AV. Privately some Cameroons, including the Education Secretary Michael Gove, even talked up the benefits of a Yes vote – to keep Labour out through Tories and Liberal Democrats casting their second preferences for each other.

This went down badly with Tory MPs, worried that AV would kill off the chances of a majority Tory government in future. There were dark warnings that Mr Cameron's own position could become precarious if he lost the referendum.

The penny finally dropped. In the new year, senior Liberal Democrats sensed a change in the air. "One day, the atmosphere suddenly changed. You could sniff it," one insider said. Mr Cameron ordered Tory HQ to pull out all the stops to ensure that AV was rejected – even though that meant breaching his understanding with Mr Clegg.

An informal "no surprises" rule underpinned the Coalition Agreement struck a year ago. In Liberal Democrat eyes, the Tories have now broken it three times: the top-down reorganisation of the NHS, when Mr Cameron vowed to carry on using unpaid interns after Mr Clegg had called time on the practice, and when the No campaign attacked the Liberal Democrat leader for "broken promises".

From now on, the Liberal Democrats will have some surprises of their own. Can the Coalition really last until 2015 in such circumstances? At first glance, it looks difficult. This week's bust-up round the Cabinet table over AV is a foretaste of what could happen in the year-long run-up to the next general election during which both parties envisage going their separate ways. The infighting could well start before 2014, bringing the Coalition to a messy end.

Yet despite the bitterness in the air as the anniversary approaches, senior figures in both parties believe their shared interest in serving a full five-year term remains. The Tories need time to clear the deficit and offer the prospect of better times ahead. Mr Clegg needs to show that "coalition works" in Parliament, and hopes to win some respect for administering the economic medicine. It will be harder than he thinks: his "nightmare Thursday" suggests his party may be doomed to get the blame but never the credit.