If the LDs team up with Labour they could still end up being swallowed up at the next election - unless they are able to drive through PR. Its possible that Labour would be better off remaining in opposition - hoping to capitalise on an unpopular LD-Tory alliance at the next election. In any scenario the dangers for the LDs are the greatest.
So how do the LDs deal with this? What is their best option? As I said in my last post the LDs have to go for broke. A coalition with Labour with a cast iron guarantee of a referendum on electoral reform is their best bet. It would also give them experience of government which they desperately lack. If they can achieve PR they can change the political landscape forever . It's a high stakes game but worth the risk. Nobody could have made up a situation which is so complex and finely balanced - except the UK electorate that is! Have Clegg and co. got the bottle to go for it? Watch this space!
Oh and I nearly forgot to mention - nobody is saying anything about the elephants in the room - climate change and peak oil.