Vince Cable will back Nick Clegg in a key vote over Liberal Democrat economic policy, sources have confirmed.
The Deputy Prime Minister, who will take the unusual step of speaking in a debate on the policy at the party's conference in Glasgow, was forced to play down suggestions of a split with Business Secretary Mr Cable over the issue.
And a source close to the Business Secretary insisted he would be voting in support of the motion and claimed the issue had been "completely blown out of proportion".
The move marks a climbdown by Mr Cable, who has previously dodged questions about whether he would lend his support to the motion, suggesting it could be improved drawing on suggestions from the party's left. But the source said: "Vince will be voting to support the motion. This whole issue has been completely blown out of proportion and Vince will support Nick."
The Deputy Prime Minister said he was "leading from the front" by speaking in the debate. And he insisted Mr Cable - who will not be speaking despite earlier expectations - was fully supportive of the text. "We do agree, we have sat around the Cabinet table for the last three years agreeing fulsomely on the need to fill the black hole in the public finances left by the Labour Party, to reform the banking system," he told the Press Association. "There is a strong agreement there."
He told Sky News: "Vince and I work very closely together. I don't run a boot camp, I don't determine exactly who is in which room at what time. What Vince and I have done is work on the ideas in that motion - which he has made quite clear he supports - together. This is a total storm in a teacup. Vince has made it quite clear he supports the motion, and also he supports some of the amendments to the motion. Of course, we are accepting some changes to the original motion in the spirit of grown-up debate."
The motion, Strengthening the UK Economy, invites activists to "reaffirm support" for the coalition's fiscal mandate - which says the Government's books should balance by 2017-18. Mr Clegg will be the final speaker - the first time a Lib Dem leader has chosen to take the stage in such a debate for more than six years. But activists have put forward amendments that urge a "rebalancing" of the fiscal mandate "to give greater support for measures that raise employment and growth". There are also demands for a dramatic increase in housebuilding, financed in part by removing council borrowing limits so they can spend more. Another suggested change urges adjusting the Bank of England's mandate so it targets boosting household incomes.
A source close to Mr Clegg confirmed the leadership would accept an amendment calling for Lib Dem policy beyond 2015 to be based on higher capital investment, rebalancing the economy, and raising more money from "wealth taxes" such as the mansion tax. The source insisted he was confident about defeating the other changes, warning that they would lead to higher government borrowing. The amendments would not be binding on Mr Clegg, but losing any of the votes would be highly embarrassing. The text of the motion was apparently hammered out during an away day for Lib Dem ministers in Milton Keynes over the summer.
Speaking to BBC Radio 5 Live, Mr Clegg refused to say whether he would prefer to forge a coalition with Conservatives or Labour if the next election results in a hung Parliament. "I'm not the one to answer that," said the Lib Dem leader. "It's the British people who are going to give me and the other party leaders our marching instructions after the next election. Ed Miliband, David Cameron, me - we are not the people to decide how the next government is composed. The people who decide that are the millions of people who will vote in the election of May 2015."
He added: "I would certainly ensure, if we were in a coalition with Labour, that we would keep them on the straight and narrow on the economy, just as within the coalition with Conservatives we make sure that we are doing things to promote fairness which never would happen if the Conservatives were in power on their own." Mr Clegg dismissed suggestions that he would demand the removal of shadow chancellor Ed Balls from his post as part of the price for sealing a coalition deal with Labour. "It's not for me to tell other parties how their team is composed, just as it's not for the other parties to tell the Liberal Democrats what the composition of our team is," he said.