With the Tories polling at between 34-39%, Labour finding it hard to get more than the mid-30s and the LDs on a solid 22% there’s just a chance that the next election could produce a hung Parliament. If that was the result what would happen? What deals would be done? What sort of Government would we have?

This has the makings of a really interesting betting market – what will be the make up of the Government after the next election?

The heart of the issue is which direction would the LDs go? Picking this up a week or so ago the Independent on Sunday’s veteran political commentator, Alan Watkins, made the following intriguing comment.

In years to come, I predict, when we are ruled by the Howard-Kennedy coalition (after the Conservatives have moved slightly to the left, and the Liberal Democrats slightly to the right), one of the sadly diminished number of Labour members will look into his pint of Federation ale and say: “Aye, lad, if we’d had sense to take up – what’s it called now? – that fancy-dan alternative vote, things would be right better today.

Watkins takes up the theme again in today’s Independent on Sunday noting that the absolute certainty that Labour will win the next election has started to erode and that a “hung parliament” is now a possibility.

For the Liberal Democrats, Watkins observes, the best electoral outcome is for the Tories to do as well as possible – “provided that this is at the expense of Labour rather than of the Liberal Democrats”.

Such logic, which is clearly right, is quite hard for many LD activists to swallow. The party’s dramatic growth has been at the expense, almost exclusively, of the Tories which is seen too often as the enemy and not Labour. Yet to be in any kind of position of strength the LDs need the Tories to take a lot of Labour seats.

Yet this does not come out in the rhetoric from the LD leadership – particularly Charles Kennedy who always seems to be more comfortable attacking Michael Howard than Tony Blair – which is a huge strategic mistake.

As an LD I find it hard to envisage the party going in with the Tories as Alan Watkins suggests. But Tony Blair did himself no good with the LDs by holding out the olive branch of PR, putting something in the manifesto, and then reneging on the deal. Blair’s taking us to war without UN sanction is felt very deeply by the LDs and the continuing problems in the country make things much worse.

Michael Howard is hungry for power – just look at the way he’s turned the Tory social agenda upside-down – and my guess he would be more ready to deal with the LDs than Labour which would probably be obcessed with recriminations over the result. But would the LDs prop up the return to power of the Tories under Howard? It would be hard selling this to the activists and, somehow, I do not think the Kennedy would go down this route. Maybe another leader would act differently?