- guardian.co.uk, Sunday 9 May 2010 22.17 BST
Gordon Brown is being pressured to declare he would be only a transitional figure in any coalition arrangement. Photograph: Graeme Robertson for the Guardian
Gordon Brown has been told by a number of cabinet ministers that he must announce he would only be a transitional figure in any Lib-Lab deal dedicated to introducing electoral reform.
He has been told his continued presence would not only stigmatise a Lib-Lab coalition, but also any referendum on a more proportional voting system for the Commons. Cabinet members believe the public will not change their negative view of Brown, and despite what they see as his stamina, personal courage and dignity in the campaign, he probably cost Labour 40 seats.
The chances of a coalition deal involving Labour is receding fast, cabinet ministers recognise, partly because they know the Liberal Democrats believe Brown's continued presence as prime minister would be seen as illegitimate by the public.
Equally, the illegitimacy of a coalition of the losers between Labour and the Liberal Democrats would become the issue in any referendum on electoral reform, making it very unlikely that the electorate would back such a deal, so setting back the chief Liberal Democrat goal for decades.
The Guardian has been informed that a series of cabinet ministers have told Brown he can at best only stay for a limited time to guide Britain out of recession or to achieve political reform. So far no simple timeframe for his departure has been agreed nor a mechanism for finding a speedy replacement.
Senior ministers were talking to Brown individually and collectively on his return with his family from Scotland to Downing Street. One government source said: "There is a slightly strange mood inside the party, we have got 29% of the vote, we lost 80 seats, but because we have not been annihilated and we managed to come second, we are quite bullish. The truth is there is no road to recovery with Gordon, and there are too many Labour MPs with vulnerable seats."
Cabinet sources also dismissed suggestions that Brown would strike a deal with the Scottish and Welsh nationalists, accusing the SNP and Plaid Cymru of grandstanding by claiming they had a role, and insisting a half-stable coalition could instead be built from Labour, Liberal Democrats and the Democratic Unionists.
But there are many in the cabinet who are not yet willing to surrender, and believe passionately there is a progressive coalition of principle to be constructed with Clegg's party. Ministers such as Peter Hain, Lord Mandelson, Ben Bradshaw and Lord Adonis have been conducting a "talk to the Liberal Democrat MP you know strategy". They have been offering not just an olive branch, but an olive grove to lure the Liberal Democrats, trying to underline to them the certainty of a referendum on electoral reform under Labour.
Liberal Democrat MPs have also been delicately warned they will be obliterated at the next election by Labour if they form an alliance with the Conservatives to cut spending. One cabinet member said: "If the Liberals do a deal, they will be toast at the next election. We will be under a new leader and will describe the Tories and Liberal Democrats as a coalition of cutters. You can write the leaflets now."
One of the most enthusiastic proponents of electoral reform in the Labour cabinet argued: "The Liberals have got to realise two things. First, the chances of winning a referendum with a Cameron-led government are minimal. Labour will sit on its hands, the media will be against, and so will the Tory party.
"Secondly, the Lib Dems have to realise they cannot have anything more than the alternative vote – if they ask for more, such as the single transferable vote or the AV plus, that will require a redrawing of constituency boundaries, and that will not be possible before the next election."
Labour also senses that the Liberal Democrats face few good options. "For them, it is pick a card, you lose," said one Labour source.
Labour recognises there is resistance among many prominent Liberal Democrat MPs and peers, including the former Liberal Democrat leader of the Lords Lady Williams, to a full-blown coalition. It feels there are other senior voices behind Williams that might yet break cover, leaving Clegg with no option but to agree to allow Cameron to form a minority government in which the Liberal Democrats agree to the budget and a Queen's speech. Even then Clegg will be complicit in the Tory cuts programme.
That is leading a growing body of older ministers to argue that Labour should now recognise this is a good election to lose, relinquish power and regroup with dignity.
A clutch of former senior ministers including David Blunkett, the former home secretary, George Howarth the former Home Office minister, and Malcolm Wicks, the former energy secretary, were arguing that it is best for Labour to admit defeat, hold a leadership election and come back to crush a Conservative/Liberal Democrat coalition of convenience at the next election.
In a foretaste of the attack Labour will mount on the Liberal Democrats, Blunkett said: "We're going to have, by the look of it, a coalition government with a Liberal Democrat partner that doesn't believe one word of the Tories on Europe, doesn't believe in the Tories' economic policy and has considerable doubts about their approach in terms of taxation, not least in terms of inheritance tax, but is having to go in with the Conservatives in order to gain power."