Miliband says Lib Dems see Labour as 'vehicle for hope'
Labour leader Ed Miliband has appealed to disaffected Liberal Democrat voters to work with the opposition against the coalition government.
In a speech at the Fabian Society he said "thousands" of Lib Dems had now joined the Labour Party.
He also said he hoped the party realised that entering a coalition with the Tories was a "tragic mistake".
But the Lib Dem deputy leader, Simon Hughes said they should "resist the blandishments of the Labour leader".
Mr Hughes said: "Last May, the electorate walked away from Labour and Labour walked away from government.
"Liberal Democrats took up the challenge and decided that Liberal Democrats in government would achieve far more towards a liberal Britain by joining and making more progressive the government rather than stepping back and allowing Britain to be run again by the Conservative Party on its own," he added.
Transport Secretary Philip Hammond, said Labour did not have a sound economic policy to offer voters.
"Most Liberal Democrats understand that we have to address the fundamental economic challenges this country now faces before we can build the progressive society that we all want to live in and until Ed Miliband has a credible plan for dealing with the deficit he's not in a position to make a pitch to anybody," said Mr Hammond.
Mr Miliband said he was pleased many Lib Dems "now see Labour as the main vehicle for their hopes in the future".
He also said he would not join in "gloating" over his party's victory in the Oldham East and Saddleworth by-election.
That result saw Labour boosting its majority from 103 to over 3,500.
During his speech Mr Miliband said he wanted Lib Dems to "find a welcome home in our party, not just making up the numbers but contributing actively to the strengthening of our values and the renewal of our policies".
He also said Labour must become again "the standard-bearer of the progressive majority".
Mr Miliband said: "Forgive me if I decline to join those of you who are gloating at the expense of the Liberal Democrats.
"Their decision to join a Conservative-led government was a tragic mistake, and I hope they come to see that in time.
"But, equally, there are many Liberal Democrats who've decided to stay and fight for the progressive soul of their party. Most of them do not want to see their traditions sacrificed for personal ambition. I respect their choice too. And I understand how painful it is - and must be for them - to watch what is happening to their party.
"We do not doubt that they hold sincere views and we will co-operate, in Parliament and outside it, to fight with them against the direction of this government.
"In fact, it's our duty to work with progressives everywhere... against what this government is doing."
Writing in the Guardian, Mr Miliband earlier said he "respects the choice" of Lib Dems who have decided to stay and fight for the soul of their party.
The BBC's Tim Reid said that the Labour leader also had some uncomfortable words during his speech for his own party, saying it had got things wrong in government and had to learn lessons from that.
Mr Miliband also said his long-term vision for the Labour party was to earn the right to govern again from the British people, our correspondent added.
In Thursday's by-election, Debbie Abrahams finished 3,558 votes ahead of the Lib Dems with 14,718 votes. The party's share of the vote increased from 31.9% to 42%.
But Lib Dem Elwyn Watkins fractionally increased the party's vote share on the 2010 result from 31.6% at the general election to 31.9%.
The Greater Manchester by-election was called after a special court found ex-Labour minister Phil Woolas made false statements about Mr Watkins in May's general election, in which Labour retained the seat by just 103 votes over the Lib Dems.
The ruling invalidated the result and resulted in Mr Woolas being barred from politics for three years.