Clegg prepares for first conference

A bruising revolt over Europe by almost a quarter of his MPs this week has put his leadership under an intense spotlight as activists gather in Liverpool.

Mr Clegg insisted the furore was no more than a passing "squall" and said his three-month tenure had left the party more confident than it had been for "a very long time".

He said he was ready for a "lively debate" with the grassroots over a proposed NHS shake-up including directly-elected local health boards and greater use of the private sector.

Three of Mr Clegg's senior front bench team were forced to quit when they joined 12 colleagues in defying his orders not to vote for a referendum on the Lisbon Treaty.

But he said he had been right not to offer critics a free vote - suggesting that could have exposed even deeper divisions within the party over the issue.

Mr Clegg faces a fresh potential fresh clash on the issue in the House of Lords where a Lib Dem abstention could allow the Tories to secure peers' approval for a referendum.

He said he was yet to discuss the issue with his colleagues in the Lords but predicted the Conservatives might not even attempt to push it through the upper House.

"The Conservatives might well think twice about tabling an amendment. The Tories have so many pro-European heavy hitters in the Lords who would make Ken Clarke's views on the referendum look moderate. There is a long way to go on all of this."

Playing down the significance of the defeat, he said: "This is a squall which won't in any way affect the optimism I think the party has got in bucket loads at the moment. You will see that confidence this weekend."