Talks progressing: but selling it to the parties?
I've been on Whitehall half the day - see the movie:
Here's what I think is happening, based on calls to several wings of Labour and a source close to the Conservative team.
Lib-Tory talks are certainly progressing because the Conservatives proffered, and the Libdems accepted in principle the idea of a socially liberal government, real power sharing, significant cabinet seats and policy compromise. That is an alliance based on principle not tactical convenience.
But the sticking point is the scale of the Conservatives offer on PR (I cannot find out for definite what it is, but it's more than they started with and less than the libdems want - and it certainly does not include a referndum on full PR).
However both parties face major angst - from their membership, their blogosphere and their backbenches. I think tonight is all about trying to quell that. Libdems are speaking about various padlocking bills that would remove control over the electoral timetable from the PM in a LibTory government, so that Cameron would not be able to hold a permanent gun of summary dissolution to the Libdems' heads throughout the coalition.
If the memberships and backbenches don't buy the coalition, we could see a reversion to the minority Conservative government project but with a formal agreement to vote for budget and confidence.
Now to Labour. There is growing fury with Gordon Brown and, now they've had time to think about it, the campaign. I have spoken to several Labour backbenchers and apparachicks tonight - from different wings of the party - and the adjectives used to describe the campaign, the personal performance of the PM etc are generally disparaging: managerial is one of the repeatable ones.
Large parts of the Labour voting base, the Guardian etc, believe it's still possible to create the Lib-Lab-SNP "progressive coalition" and get PR. However very few front rank Labour politicians are out there arguing for it: Alistair Darling, despite having a hefty task in front of him in Brussels, has been the most upfront in keeping it alive.
During the day I have heard several high profile Labour backbenchers move over to the "go gracefully into opposition and do it soon" line, though mostly still in private.
Then there is the leadership issue. It breaks into two parts. First, even though there is no "coronation", if the David Miliband camp and the Jon Cruddas camp were to get together it would make David Miliband hard to stop. Labour would suddenly have, goes the argument, an Attlee and a Nye. A plausible centrist leader and a leftist who can reconnect with the base. This is being mooted but is not a done deal.
Since Harriet Harman has ruled herself out of seeking the leadership I can see Ed Miliband emerging as a candidate backed by parts of the union movement (eg the GMB) who don't want an alliance with David Miliband. Ed Balls would be backed to the hilt by the existing party machine, Unite and to an extent the "old Labour" left; also the Scottish Party.
The Labour NEC meets on Tuesday and Labour officials are in a rolling meeting schedule until then to decide how to respond if the party goes into opposition. One told me to expect civil war between the Brown "machine" and all those hitherto excluded from it, from the moment the PM leaves office.
And the Euro-crisis is also focusing the timescale with Labour as well as the Lib-Tory talks. If you think there will be an election in six months and the big issue is going to be competence and coherence of a Lib-Con coalition, the argument goes that anti-Euro David and pro-Euro Nick should probably be handed the job of dealing with the global fiscal meltdown as soon as decently possible.