It will come as no surprise to anyone that the Lib Dems have had a poor night in the local elections and the referendum.

Nick Clegg has taken a beating over the last few months, accused of being a liar and a Tory stooge. The eight point drop in the Lib Dem national projection is not unexpected and almost all of it has gone to Labour.

At time of writing (around 5am) Liberals have lost councils in straight up pitched battles with Labour in Liverpool, Sheffield, Hull and Manchester. Much of the party’s vote has evaporated in Scotland and Wales.

It's not all gloom and doom for the Yellows though. Their vote is holding up in the south, with the party clinging on to Eastleigh, Eastbourne and Portsmouth. Whilst it’s been tough going in the north, if this is the Lib Dem low water mark there’s plenty of scope to bounce back. That of course doesn't change the fact that tonight is as bad as it comes.

Liberal Democrat pain was foreseen, but Labour expected to capitalise tonight and has failed. Ed Miliband may be clearing up in the northern cities but Scottish Labour has been roundly trounced by the SNP and in England Labour has failed to make any progress in the south against the Conservatives.

The scale of the Labour collapse in Scotland, traditionally a major heartland, is chronic and a major headache for Ed Miliband. The argument goes that if he can’t lead Labour to victory in Scotland, with Tories in government in Westminster, he has no hope of winning a UK wide poll –Labour is facing losing some of its safest seats.

The predicament in Scotland, the failure to convert Conservative voters coupled with a failure to lead a united Labour party, let alone a united Labour front bench in the referendum is, I’m told, causing Labour MPs to whisper about his leadership. Lacklustre doesn’t quite cover it and discontent against the Lib Dems won’t last forever.

Meanwhile, on the face of it, the Conservative Party is having the best night of the three main parties. Their losses have been kept to a minimum, their vote is holding up and Cameron looks set to have secured a no vote in the referendum. 

Whilst Cameron has won the battle tonight, he has, however, holed himself below the waterline in the war. Win or lose, the conduct of the referendum has left a sour taste in the mouth of Liberals and undermined Cameron’s efforts to rebrand his party.

Cameron has spent much political capital and a great deal of time changing perceptions of his party, to detoxify the party image and dispel the perception of the nasty party.

David Blunkett's admission that the No campaign, funded and supported mostly by the Conservatives, lied its way through the referendum undermines trust in the Conservative brand. Cameron’s failure to distance himself from allegations that AV would kill babies has the tinge of the nasty party about it.

Make no mistake, Huhne’s outburst at Cabinet was not leadership machinations. He is genuinely aggrieved at a Conservative-backed campaign accusing Clegg and the Lib Dems of broken promises – policy compromises that keep Cameron in Downing Street. Paddy Ashdown joined the attack on Question Time last night saying that "goodwill and trust in the Tory leadership has now evaporated."

The sense of betrayal and foul play is real among the Lib Dem leadership at a time when neither party can afford navel-gazing – it will not lead to the collapse of the coalition, but tonight the trust crucial to its effectiveness and the willingness for Clegg and co to take hit after hit as the Tories remain unaffected has disappeared.

The Tory’s No campaign has truly been Goebbels-lite, adopting, as Blunkett admits, multiple Große Lüge - Big Lies, said often enough that they became truth. By pursuing victory at any cost over his coalition colleagues Cameron may well have notched up a Pyrrhic victory.

Tags: AV referendum, Conservative Party, David Cameron, Labour Party, Lib Dems, Local Election 2011, Nick Clegg, Scotland, Wales