Team Clegg left ‘frazzled’ by being in power

He has reshuffled his aides, appointing a powerful new chief of staff, and brought in new blood to cope with the deluge of Whitehall documents passing across his desk.

The Liberal Democrat leader today denied in a BBC interview that his party was being damaged by being in coalition with the Tories.

"If we weren't in a coalition now I don't think people would take any notice of the Liberal Democrats. If we were in a coalition with Labour arguably our identity crisis would be even worse," he said.

However, Lib-Dem insiders admit that key staffers have become exhausted by keeping up with the demands placed by Mr Clegg's position in the power-sharing government. He negotiated the right to see every important decision going before the Prime Minister and to know what is going on in all departments, creating a daily deluge of paperwork that has to be inspected for elephant traps that might affect the Lib-Dems.

Sir Philip Green's new role as the government's efficiency adviser has highlighted the problem.

The Times reported that Treasury Minister Danny Alexander is being accused of failing to alert Mr Clegg to the likely row over the tycoon's tax affairs, which the Lib-Dems had previously criticised strongly.