Tory-leaning Nick Clegg a prisoner of his own party

Nick Clegg, the Lib Dem leader, wants to do a deal with the Tories but has become a prisoner of his own party who want him to accept the offer by Gordon Brown to prop up Labour in a 'Progressive Alliance'.

Clegg looked shattered after a long meeting with senior Lib Dem figures broke up at 12.30 am this morning and he will have more meetings with them today.

Old Liberals like Simon Hughes and Paddy Ashdown are keen for a deal with Labour to create a 'progressive alliance' but Clegg is arguing that it won't work. And although he only promised to "speak first" to the party who won the most seats and the biggest share of the vote, he clearly wants to do a deal with the Tories, not least because he finds Cameron and his top team more congenial.

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David Blunkett, Labour's moralistic former Home Secretary, accused the Lib Dems of acting "like harlots". He said: "I don't like what is taking place at all." The markets didn't like yesterday's news either, resulting in a 1.5 per cent fall in the FTSE index within minutes of the market opening this morning.

As for Labour, there are already signs that Gordon Brown's audacity - compared by Tories to the 'theft' of the elections in Zimbabwe by Mugabe - threatens to split the party ranks over the deal.

Brown risks a rebellion from Scottish Labour MPs because his 'master stroke' depends also on a loose alliance with the SNP and, as the Mole has pointed out before, Labour in Scotland hate the SNP more than the Tories.

Tom Harris, the Labour MP for Glasgow South, warns Brown on his personal blog (in which Harris appears in a devil outfit with horns) that the PM won't be able to deliver his offer to Clegg to drive through legislation to allow AV (the Alternative Vote electoral system) before the next election. "This cannot be delivered; Labour MPs will not support it. I do hope some senior Lib Dems are reading this," said Harris. "I view the likelihood of a Lab-Lib-SDLP-Hermon-Alliance-DUP-SNP-Plaid Cymru coalition unlikely in the extreme."

David Cameron made a desperate last throw by offering Clegg a referendum on AV, with the proviso that the Tories would have a free vote (like the Wilson Cabinet in the referendum on devolution).

The Tories have also agreed in their private talks to adopt the Liberal Democrat plan to take everyone earning less than £10,000 out of tax altogether, even though it would cost £17bn which the Tories haven't properly costed.

But with Ashdown & Co piling on the pressure, the odds are on Clegg siding with Labour. Which means Britain will be ruled by a dead man walking until a new Labour leader can be elected. It also means the electorate could have a voting system for which they never voted and a new prime minister who was not even there on the platform during the recent TV debates.

If Clegg does jump into bed with Labour, the Mole believes he will at least insist that Brown's replacement is chosen as swiftly as possible – even if Gordon hopes to hang on long enough to see some sort of economic recovery.

"Barack Obama had the audacity of hope – Gordon Brown has the audacity of power," one Tory grandee told the Mole.