Osborne insists that a LibLab pact would not be stable or legitimate

I've listened to a fascinating twenty minutes on the Today programme after 8.10am.

Although I think some sort of LibCon arrangement is still most likely, a LibLab pact is now a very serious possibility. Paddy Ashdown insisted that a minority LibLab government could provide stability. He said that the pact would not need an absolute majority, only the ability to outnumber the Tories. The total number of Tory MPs is 306 but the total number of Labour and LibDem MPs is 315 (258 + 57). The former Liberal Democrat leader thought it very unlikely that the minority nationalist parties - largely of the left - would vote a LibLab government out of office. These minority parties would, in these circumstances, be bought off with pork-barreled politics of the worst kind. It's also true that a LibLab pact would be very vulnerable to being held to ransom by malcontents within either the Labour or Liberal Democrat parties.

It was clear that Lord Ashdown's heart is in a LibLab deal. We may yet have to stomach a LibCon pact, he said, but described the Tories as "rabidly anti-European".

Interviewed just before Lord Ashdown, George Osborne said that voters "should not see things as a straight choice between two strong and stable governments." A Liberal-Conservative arrangement, he said, would have a solid majority and a Prime Minister who'd been through the TV debates. A Liberal-Labour arrangement would be inherently unstable because it would rely on nationalist votes and it would lack legitimacy because it would be led by another unelected Labour leader.

Mr Osborne said that the Tory-Liberal talks had gone well. He said the Tories were already signed up to two of Nick Clegg's key demands before negotiations even began; a premium for poorer pupils and a greening of the economy. He said that the Tories had moved towards the Liberal Democrat policy of taking the poor out of income tax and, on the Liberal Democrats' fourth goal of political reform, had offered a referendum on AV. This, he continued, was in addition to other political reforms including the power for voters to recall dishonourable MPs. Mr Osborne claimed he had the support of Tory MPs for the AV referendum. Not so fast, George. One frontbencher texted me last night to say that "a substantial body of MPs do not support the AV offer". The Tory leadership could probably force the parliamentary party to vote for it but only by creating enormous ill-will. On CentreRight, 'The Lurcher' questions the need for Cameron to have conceded AV.

David Blunkett, former Labour Home Secretary, warned his party of the consequences of a LibLab pact: "A massive defeat for Labour at the hands of an electorate who would blame us for flouting the will of the substantial minority."

Tim Montgomerie