PROFILE The Liberal Democrats: A party that wants it both ways

What are the Liberal Democrats for?" How that damned wretched question infuriates the curious assortment of political activists who gather each year for their week in the limelight. The sensible, the silly, the self-righteous, the moderates, the progressives, the moderately progressive, all unite in anger when the question is posed.

"What are we for?" they cry. "We run a large chunk of the country for a start," they continue, referring to their municipal might. "And...", but usually at around this point the indignation subsides. The rest of the answer is too complex and potentially divisive for this small, still evolving, ill-defined party to chorus in unity any longer.

There was a time not so long ago when the "What are you for?" question was answered more easily. In the 1980s when Labour was anchored on the left and the Tories were heading for their Thatcherite idyll on the right, the third party had plenty of political space to itself. With the old Alliance soaring briefly in the polls, the euphoric followers of the Liberal and Social Democratic parties could claim they had the most noble purpose. They represented the aspirations of those many voters who were being callously and foolishly ignored by the big two parties. Since Tony Blair became leader of a party that soars in the polls and wins landslide elections, the case cannot be put so convincingly.

But, in a way, the question that so annoys the party's hard-working activists is a rather flattering one. It assumes that they have answered already two other, more fundamental questions. One of these is: "What do the Liberal Democrats stand for?" and the other is even more basic: "Who are the Liberal Democrats?". Such questions , if posed to the faithful in Harrogate this week, would make their blood boil. Untested by a largely indifferent media, they have a well-developed sense of their historic mission, at odds with the degree of power they exert.

But who are they? Consider the contrasting views of the two most senior politicians who have been involved with the third party of British politics.

First Tony Blair, despairing of his own party in the 1980s, became an admirer not only of the Liberal Democrats but the Liberal tradition. He liked and admired some of the party's senior figures more than some of those who sat on his own front bench. For the powerless Blair in the 1980s and 1990s, the Liberal Democrats had policies and traditions closer to the aspirations of ordinary voters. He saw closer ties with the party as not only desirable, but a precondition to a period of sustained power.

Now, for our second guide, let us take the former leader of the SDP, David Owen. Like Blair in opposition, Owen had an appetite for power, reminiscing often about his brief moment of glory as foreign secretary in a Labour government. He came to despise the Liberals, and later the Liberal Democrats, as a party of idealistic, often incoherent protest. In recent years he has contemplated joining new Labour, but would never touch the Liberal Democrats.

So Blair has seen, and possibly still sees, the Liberal Democrats as a potential partner in power. Owen regards them as a party uninterested in the harsh realities of power. Both, however, in their own ways, are right.

At the top of the party and scattered around the lower rungs of the hierarchy are highly intelligent, ambitious politicians who would make the transition to national power with ease. Paddy Ashdown is one example, as Blair recognised early in his leadership. Menzies Campbell is another often mentioned, but there are several others in Charles Kennedy's parliamentary party who would make the ministerial grade. The party has elder statesmen and women who have exercised power and who, in some cases, wield influence still. Arguably Lord Jenkins has had more impact on Blair than any other former Labour cabinet minister from the 1960s and 1970s.

But the party has a unique capacity to frustrate its leaders. It took three long grinding years for Ashdown to persuade his activists to drop the preposterous pretence that the party had as much in common with the Conservatives as it did with Labour: three arduous years at a time when the Conservative party was falling apart under John Major. Ashdown began his mission after the 1992 election when the Conservatives had won again for the fourth time. In a speech he raised the possibility of parties working together, possibly, maybe, one day. He could not have put the case more tentatively.

Some in his party hit the roof. At the 1992 party conference speaker after speaker rose in protest arguing that the Liberal Democrats would win power alone in the near future. They insisted that their policy, known by the appalling term of "Equidistance" should remain intact. Ashdown finally managed to persuade the purists to face the realities of political life at the party conference in 1995. Even then he did it so subtly, in his leader's speech, that some of them did not realise what had happened until some time afterwards.

The old Liberal Party was the same. Each of its recent leaders got tantalisingly close to a taste of power, but faced unbearable internal pressures. Famously after the February 1974 election Jeremy Thorpe was offered a place in a Conservative cabinet by Ted Heath. Thorpe's parliamentary party reacted with horror at the prospect. David Steel's Lib/Lab pact was viewed with great wariness by much of the party. There was considerable relief when it collapsed although it presaged 18 years of Conservative rule. Under his leadership Ashdown did not dare utter the word "coalition" although he and Blair were making plans. His parliamentary party shuffled uneasily when Ashdown revealed the possibility to them at a private meeting before the election. In an interview with the New Statesman a few days before the 1997 conference he revealed in more detail his hope for a coalition with Blair. The ensuing row nearly wrecked that year's conference.

What explains this schizophrenia? Part of the answer is political and tactical. In parts of the country the Lib Dems' main enemy is Labour, not the Conservatives. They have fought bitter battles in local elections and subsequently in the town halls. To be cosying up to Labour is seen as a betrayal , a gift to the Conservatives, and therefore political suicide. There is also a wider political strategy, supported by some in the party, which goes along the following lines. The Conservatives are on the verge of an even more serious collapse. The Lib Dems could be the main beneficiaries, but not if they are seen as being too close to Labour. There is also, across the party, a genuine hostility to the control-freakery of new Labour.

In some ways Charles Kennedy personifies the schizophrenia. Before he became leader he positioned himself as the main critic of closer ties with Labour. In an interview last year he warned: "If you can't ride two horses at the same time you should get out of the circus." Kennedy was partly positioning himself , appealing to those self-righteous Lib Dems who do not want to be contaminated by power. But he was also grappling for a new strategy aimed at ensuring that disillusioned Tories headed for the Lib Dems. He thought it might be possible for the Lib Dems to come second, at least in terms of the popular vote at the next election. In the end, though, Kennedy is a realist and ambitious. He wants to be a cabinet minister and knows this is much more likely in a Labour coalition than with the Conservatives. As his recent secret meeting with Tony Blair revealed, he will pursue a similar strategy to Ashdown's.

But politics cannot alone explain the behaviour of this party. There is a silly tendency which defies political analysis. Which other party would hold a leadership contest that effectively lasted seven months, at one stage had a field of nine largely anonymous candidates, and finally anointed its new king in August when most people were on holiday? Similarly, on a grander scale, which party seeking power would get in such a state when it comes close to exercising any at a national level? Such behaviour is eccentric to say the least. And many Liberal Democrats are eccentric.

Even so, at this particular political juncture the Liberal Democrats have a task and an opportunity. With a Labour government in awe of focus groups and the media, they can flex their progressive muscles to some effect.

Schizophrenic the party may be, but there is common agreement on important themes. Liberal Democrats are pro-European and are the only party that wanted Britain to join the single currency at the start. Astutely, Kennedy has identified social justice as a theme neglected by new Labour and close to all Lib Dem hearts. In the debate which is starting to intensify over increased public spending and tax cuts, the Liberal Democrats will come down on the side of more investment in schools, hospitals and transport.

And the opportunity? Blair has not lost interest in them yet. They wield some power in Scotland. A referendum on voting reform is still promised for the Commons. Recently the veteran Labour MP Gerald Kaufman was asked by an anxious Lib Dem MP whether Blair was taking them for a ride. Kaufman replied: "Yes. He's taking you for a ride. But it's the only ride you've got." That just about sums up the political context the Liberal Democrats find themselves in. But how many in Kennedy's party realise it?