Splits emerge in Labour's election strategy

Alan Johnson breaks cover to say Labour should not fear deal with Liberal Democrats

Alan Johnson the Home Secretary, yesterday revealed cracks in Labour unity as he called for sweeping electoral reform and told colleagues not to be "frightened" of sharing power with the Liberal Democrats.

He spoke out amid growing recriminations in senior Labour ranks over a lacklustre campaign that has seen the party relegated to third place in opinion polls. His comments were seen last night as a sign that ministers are beginning to contemplate attempting to form a coalition government with the Liberal Democrats, a move that would probably require Gordon Brown to step down. The front-runners to succeed him as Labour leader would include Mr Johnson, David Miliband, the Foreign Secretary, and Ed Balls, the Schools Secretary. Last night a Miliband ally said: "There are a lot of discussions going on about David's future chances."

Labour has lagged behind the Tories and Liberal Democrats since the first televised leaders' debate, but could still secure the largest number of MPs because of the vagaries of the electoral system. The latest poll of polls for The Independent today puts the Conservatives on 32 per cent, the Liberal Democrats on 30 per cent and Labour on 27 per cent.

Mr Clegg dismissed as "preposterous" the notion that Mr Brown could remain in office if Labour secures only the third-largest share of the vote in the general election. Hours later Mr Johnson echoed the Liberal Democrat leader, agreeing it would be "much more difficult" for Labour to continue in power if came third in the popular vote. The Home Secretary said he did not believe the "horror stories" about how a "more balanced parliament" would operate. He told BBC One's Politics Show: "I think it's a nonsense to continue to lecture the public about this spectre of a coalition government. I don't find that as frightening as some of my colleagues do." Asked if he was referring to Mr Balls, he said: "Not just Ed. There's lots of my colleagues who are in a different place to me on things like electoral reform."

Mr Johnson, a long-standing supporter of proportional representation, also suggested that Labour could go further than its current proposal for a referendum on the alternative vote. He said he favoured the hybrid "AV-plus" system proposed by the late Liberal Democrat peer Lord Jenkins in 1998.

Mr Clegg had previously refused to be drawn into speculating in detail over post-election scenarios other than saying the party with the biggest mandate – a word that had gone undefined – should get the first chance to govern. In a significant shift of position yesterday, Mr Clegg told BBC One's The Andrew Marr Show he would not throw a lifeline to a party that had been out-polled by the other two major parties. "It is just preposterous the idea that if a party comes third, in terms of the number of votes, it still has somehow the right to carry on squatting in Number 10 and continues to lay claim to having the Prime Minister of the country."

His comments – repeated three times – were aimed at countering the repeated Tory accusation that wavering voters who opted for the Liberal Democrats could hand another five years' power to Mr Brown. One Liberal Democrat source said: "It was a reassurance to people who want Gordon Brown out that he would hear what they were saying." Mr Clegg also stressed electoral reform would be "unavoidable" whatever the election's outcome. That could make it hard to reach a deal with the Tories, who fiercely oppose scrapping the first-past-the-post voting method. "You cannot now duck the fact that we have a political system, an electoral system which is completely out of step with the aspirations and the hopes of millions of British people," Mr Clegg said.

Mr Clegg, whose long-term aim is for the Liberal Democrats to replace Labour as the main progressive, anti-Conservative force, did not rule out doing a deal with the Tories. He said: "I could sit around a Cabinet table with anyone who agrees with me that what we need to do is hard-wire fairness into the...tax system." Mr Clegg would face an uphill struggle to persuade his party of the merits of working with the Conservatives. Lord Ashdown, the former Liberal Democrat leader, ruled out such a coalition yesterday, saying: "Nick Clegg cannot work with David Cameron."

In the run-up to Thursday's final televised debate, Labour will attempt to turn the spotlight on Mr Brown's experience of handling the economy. In a sign of frustration in the Labour camp, the party launched a protest against Britain's broadcasters yesterday for the way they had covered the campaign. It wrote to the BBC, ITV, Channel 4 outlining their concerns the leadership debates and the polls had dominated the campaign, while policies had not been examined in detail.

The party also accused the Tories and the Liberal Democrats of pulling out of an agreement that would have seen all three parties sign the letter.

"If the public don't hear the arguments, we believe that, despite the impact of the debates, many will still be in the dark as to the differences between our plans and values," the letter states.