John Kampfner: What should Nick Clegg do next?

Has the dominant institution of the 20th century dusted itself off, modernised just enough and ensured its hegemony for the century barely begun? The question was posed of the Royal Family only a week after its consummately choreographed wedding festivities.

The same should be asked of the Conservative Party, an organisation of similar traditionalism and breathtaking professionalism. How could a party that had failed to earn the endorsement of the public a year ago, at times as propitious as the demise of the hapless Gordon Brown, have learnt the lessons so quickly? How could it have emerged in the midst of a deep recession in a stronger position?

Over the decades, the Tories' ideological adversaries have never under-estimated the task they faced. Indeed, like rabbits before the headlights, they have often seemed paralysed, with a mix of fear and awe. Each devised its own strategy, with varying degrees of success. Tony Blair re-engineered the Labour Party for the task of driving the Tories into the margins. Everything was done to secure the centre ground, leaning more to the right than left, never to veer off. This drove William Hague, Iain Duncan Smith and Michael Howard into the chilly embrace of the cranks.

Brown's analysis was bleaker still. He believed Labour had a duty to help the poor, but could do so only by stealth and by trickling down the odd penny from the super-rich. Thus he combined obsequiousness to the bankers with targeted help for the most disadvantaged.

The same questions have perplexed Nick Clegg. As the results came in during the 2010 general election, he believed he had a better chance of doing a deal with David Cameron that would allow him to sneak into the coalition agreement a few prized Liberal Democrat policies. Cameron indulged him – arithmetic gave him no choice – but he was confident that these would be small concessions.

As a supporter of Clegg who hails from a left-liberal view of politics, I have never seen his decision to enter into government with Cameron as either a mistake or a betrayal. If you believe in coalition politics, you must accept coalitions of different hues. Labour was in such disarray a year ago that the dream of most Lib Dems of finally realising a centre-left "progressive consensus" was merely a dream. It would not have lasted.

I have written many times about the Clegg tactical mistakes that followed. The new Deputy Prime Minister needed not only to trumpet Lib Dem achievements (and, yes, there have been several). He needed to behave differently within the coalition. He should have made it clear in public whenever there was a fundamental difference of view: "We advocated A, they advocated B, we settled on C", or "We couldn't agree on this policy". Two separate parties, not the merging into one. This kind of politics could have been pursued respectfully, without destroying the business-like arrangement that is vital to a coalition.

After the tuition fees debacle, with Lib Dems taking the flak for a policy that was not theirs, Clegg seemed willing to embrace this approach. In fact, even during the heavy petting of the first six months, he did occasionally strike out on his own. Last August, while his boss was away, he made clear his party's hostility to Trident. If he had chosen to, he could have proclaimed that Britain's ludicrously expensive nuclear non-deterrent may have been quietly ditched – only thanks to the Liberal Democrats (Labour, absurdly, continues to support it). He decided not to say any of this, thus ensuring that the many whose support for the Lib Dems was informed in part by their position on Trident would not appreciate what their party had done.

Underlying this caution was the mantra that so paralysed Blair and Brown – Britain is a Conservative and conservative country.

Clegg began to harden his approach at the start of this year, to make clear the distinctiveness of the Lib Dem position within government. But by that point many in the media were no longer listening. There was only one narrative: the man deserves a kicking. His task now, in adversity, is to do more than "differentiate". While the wounds are deep over the local-election humiliation, and the anger is justified over the Tories' behaviour during the referendum, it does the Lib Dems no good for senior figures such as Vince Cable and Chris Huhne to be hurling invective at their Tory Cabinet "colleagues". Petulance or self-pity never won an election. Don't get mad, get even.

The Lib Dems need to remind themselves, and try to persuade voters, that they retain a unique selling point – a belief in compassion, fairness, equal life chances and a strong society, combined with a caution about the state trying to be the panacea for all problems. They should remember that Keynes and Beveridge were liberals, as much as Rawls and Hobhouse were. Liberalism and equality are not in conflict; in an enlightened liberal politics, they reinforce each other.

In coming days, Clegg will set out his stall in a speech that will focus on specific policy positions, such as tempering Andrew Lansley's health reforms and pushing further with raising tax thresholds for the poor. He is right to focus on the here and now, and on the specifics. But, ultimately, voters go with their gut, and they need to know that his party stands for ideas that are its own.

It might seem perverse to say, but the landscape is – in the long run – not as bleak as it might first appear. There is no evidence, contrary to some assertions, that voters are moving back into two-party tribal politics. For sure, Cameron has played his first year spectacularly well. But it is just one year, and the ideological schism that so damaged the Conservatives has not disappeared. There is little sign that Ed Miliband, for all his efforts, is breaking through into the more affluent parts of Britain – a feat last achieved by Blair. His more sensible advisers know that, while it might have provided enjoyable spectator sport to duff up Clegg, Labour has focused on the wrong target. There is still at least as much reason for Labour and the Lib Dems to work together as there is for the present coalition. Both sides should keep their options open.

There is ample opportunity for a party that espouses sensible liberal values mixed with a determination to achieve greater fairness and a belief in a strong society. The Lib Dems have struggled desperately after the fees' U-turn to convince voters that they can bring these virtues to government, even this Government. Now they must fight harder, and cleverer.

If Clegg fails to deliver, he will be driven out, and his party will be destroyed for a generation. He may, however, yet succeed – but only if he shows a resilience and a political courage that has so often deserted the centre-left when given the rare chance to govern.

John Kampfner is chief executive of Index on Censorship and the author of 'Freedom For Sale'. twitter.com/johnkampfner

Mary Ann Sieghart is away