Can the Lib Dems step up to the plate?

David Dimbleby was being less than generous about the new media on the BBC yesterday (but he had an incredibly long shift, I would like some of what he is on). One group that has been formed on Facebook and has attracted over 5,000 members urges us to 'Cool it. We don't want our government linked to a 24 hour news agenda.'

Of course, the real pressure to take a decision comes from the perceived need to placate the financial markets which could reactly badly if no progess towards a government is being made by early next week. Despite some predictions, there has been no panic sell off of gilts yet. Trends in international stock markets, including an unexplained record plunge on Wall Street, have been hitting the Footsie. Sterling has lost ground against the dollar.

One of the questions in my mind is whether the Lib Dems can ever be persuaded to accept the responsibilities of government with all the difficult choices that entails? In practice their leader's freedom of manoeuvre is limited by the arcane and challenging provisions of their constitution as far as any formal arragement is concerned.

Remember also that this is a party that split (fatally) in the First World War, formed a government after it reliant on Conservative support and then split again in 1931 over the formation of a National Government, coming close to disappearing altogether. Already dissidents have been appearing in the ranks with Simon Hughes raising the bar for an agreement with the Conservatives.

Talks have started with the Conservatives. If the real deal breaker is proportional representation, David Cameron could offer a timetable for any enquiry, culminating in a referendum in which the Conservatives would be free to campaign against electoral reform. But that might be a deal too far for some of his supporters.

Talks would then have to be held with Labour about a so-called 'losers' coalition'. If the price was Gordon Brown's head, that would cause further complications and possibly lead to another 'unelected' prime minister. What all this suggests is that, having failed to deliver a clear verdict, the voters might be asked to try again in the autumn. Quite how far the absence of Gordon Brown would then help Labour is an interesting question: sometimes I think the negative effect he has had on Labour performance is overstated.

Why did the Conservatives fail to win an overall majority? I think their supported to slip when they started to talk about austerity last autumn. They changed tack, but voters' concerns about public services had been re-awakened. What is really worrying about this is that it shows a resistance to public expenditure cuts that will be needed to bring down the budget deficit whichever combination of parties is in office.