Nick Clegg: I told Cameron he was talking complete bilge

Nick Clegg has told his anxious party to "hold its nerve" as he trumpeted a long list of government policies he claimed the Conservatives would not have brought in unless they were in coalition with the Liberal Democrats.

Speaking exclusively to The Independent on the eve of a potentially difficult Liberal Democrat spring conference in Sheffield this weekend, Mr Clegg said: "We are in this for the long haul. We are going to keep our nerve. We are not going to flinch. We were right to go into government. We are doing the right things in government."

Rehearsing his speech to the conference on Sunday, the Deputy Prime Minister told his party: "Keep your head up high. Be proud of what we are doing. Don't be cowed by what people are saying about us. Stick to the course."

In the interview, Mr Clegg backed David Cameron's tough stance on Libya and hinted that Britain and its allies could intervene on humanitarian grounds even if Russia or China blocked a United Nations Security Council resolution. But he insisted Britain would never act outside the law.

Despite the growing controversy engulfing Prince Andrew, he ruled out including reform of the monarchy in the Government's plans to modernise the constitution, which he leads.

The Liberal Democrat leader signalled a new phase in the Coalition in which he and Mr Cameron will not always use the same language to promote the Government's policies, allowing the two parties to explain to their activists and the public that they are implementing their own values.

He revealed that he told Mr Cameron he was talking "complete bilge" as he sat next to him at Prime Minister's Questions on Wednesday, after he defended the current first-past-the-post system. Mr Clegg, who supports a switch to the alternative vote, whispered his jibe when Mr Cameron sat down. "We were very good humoured about it. We mutter to each other. We were just joking. We disagree on this one," he said.

In a significant change, Mr Clegg bowed to pressure from his own party to reassert its separate identity amid growing fears it is taking more of the pain from the spending cuts than the Tories.

At the Sheffield conference, he will remind his party "what we are in politics for", renewing his pitch to the huge group of voters he has dubbed "alarm clock Britain". He will argue that the Liberal Democrats have secured crucial policy gains to meet the "aspirations and anxieties" of people who don't want to rely on state benefits, work hard but are "not rich enough not to worry about paying the bills". He added: "We should never forget who we are in politics for."

Mr Clegg declared: "Without the Liberal Democrats, you would not have got a huge restoration of civil liberties; a balanced approach to Europe; a ferocious protection of human rights; a very heavy emphasis on more resources to our schools; the pupil premium; lifting thousands and thousands of people out of income tax; a £10bn levy on the banks; a crackdown on tax loopholes, a referendum in May on the voting system.

"These are early days – 10 months into a five-year parliament. All the focus is on the immediate task of the deficit. People have to hold their nerve, not lurch from one thing to the next. You have to work at it day in, day out and deliver over time, so that people see the difference you make. That is what we do and we will continue to do."

His long list of "gains" may increase the pressure on Mr Cameron from disgruntled Tory MPs who already claim the "Lib Dem tail is wagging the Coalition dog". But Mr Clegg said: "Coalition is about not everyone becoming some homogenous identikit mush. Coalition is two leaders and two parties coming together from different perspectives, resolving differences, then arguing and explaining it in their own terms."

Mr Clegg admitted that the Government had not communicated its policies well enough, saying bad news on cuts was eclipsing good policies. He cited guarantees on the basic state pension which would leave people an average of £15,000 better off during their retirement and a rise in tax thresholds next month which would leave 880,000 people about £200 better off.

"All these things will outlive the immediate task of dealing with the deficit. This Government is not going to be remembered for being chisel-faced accountants. By the next election the only party saying it wants to deliver more cuts is Labour because they would not have done the job. We can say people may not have liked this or that decision, but at least we cleared the decks and wiped the slate clean. I think other things will come to the fore as we move out of the shadow of this difficult phase of fiscal consolidation."

He said many of the decisions being taken now – such as the pupil premium for children in disadvantaged areas – would not be properly recognised for two or three years. "Brick by brick, policy by policy, decision by decision, sometimes almost invisibly, we are putting in place good policies that will make a long and lasting difference."

Mr Clegg played down criticism from his own party of the Coalition's sweeping plans to reform the National Health Service. A motion hostile to the proposals may be passed by the conference tomorrow. Insisting he was "very relaxed and very positive" about the row, he said most people in his party backed the thrust of the changes and that the debate was about technical details. He said the Government would amend its NHS Bill to ensure private sector providers could not be given preferential treatment under the "tariff" system which measures the cost of treating patients.

"People want to build this up into the Gunfight at the OK Corral. It is not like that. Most people accept we want to see the NHS become more democratic. I am very much in listening mode."

Mr Clegg said tomorrow's conference vote could not unilaterally change government policy but reassured his party it would carry "significant influence".

The Deputy Prime Minister said senior government figures should not give a "running commentary" on media coverage of Prince Andrew.

"It would be a spectacular own goal if, when we are not even halfway through our constitutional reform agenda, we embarked on a great all-consuming debate about the monarchy. It is emphatically not my priority." He said the Royal Family was modernising itself: "That is why it is successful and such a durable institution."

He dismissed comparisons between the crisis in Libya and the Iraq war, which his party opposed. "It has absolutely no parallel. Iraq was about a Labour government going to war without any legal mandate," he said.

Mr Clegg said that while a UN resolution would be the "best route", lawyers could advise that intervention to prevent a humanitarian disaster would be legal, as in Kosovo: "It is not about a piece of paper you sign. It is whether you are acting lawfully. This Government would never act unlawfully in international affairs.

"There is no question of the Government haring off on its own on some wild adventure without international sanction. We are not there yet. Where we are is unambiguously in the frontline in the international community in saying what Colonel Gaddafi is doing is totally and utterly unacceptable. He is going to war on his own people. We should not sit on our hands."

Mr Clegg shrugged off personal criticism aimed at him by voters during last week's Barnsley Central by-election, in which his party came a humiliating sixth. "You shouldn't go into politics, and certainly not into government at a time of national economic difficulty and crisis, unless you are prepared to be thick-skinned enough. The argy-bargy of politics just comes with the territory," he said.