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Nick Clegg has told supporters that he will fight to prevent the Tories dragging Britain to the right, after his party voted to reject a government plan for secret courts that could hear classified evidence at closed hearings.
Clegg promised to stop the Tories taking Britain out of the European Court of Human Rights on the same day that one of his leading campaigners, Jo Shaw, resigned in protest at the Goverrnment's secret court proposals.
Shaw accused Clegg of betraying his liberal values and likened his politics to the "realpolitik" of Tony Blair as Lib Dem members voted overwhelmingly to reject the Justice and Security Bill.
Shaw, a parliamentary candidate in 2010, called her party's handling of the bill "a car crash in slow motion" and "a textbook case of political failure".
Her decision to quit follows the resignation of human rights lawyer Dinah Rose from the party over its backing for the secret courts.
The bill will be debated by the Lords this month, with today's vote strengthening the position of peers who wish to reinstate protections thrown out by MPs, including most Liberal Democrats, last week.
Shaw said the revised bill failed to meet the demands of the party or the amendments made by peers. She said the party leadership "could have put a stop to this bill at the outset and have failed".
Shaw said: "Despite principled objections from party activists from all sides, the leadership has unilaterally decided that civil liberties is not a red-line issue.
"Today is a sad day at the end of a very sad week because I have come to the conclusion that I cannot continue to campaign to uphold the values of fairness, freedom and openness inside the Liberal Democrats under its current leadership - a leadership for whom the privilege of power has meant the betrayal of liberal values.
"The party that stood against 42-day detention, ID cards and the war on terror is led now by those who on this crucial issue employ the same shoddy logic, and have fallen into the same anti-democratic realpolitik as the Blair government. It's not me Nick, it's you."
Announcing her resignation, Rose said she hoped the party "would finally be led by someone who would act according to liberal principle and scrap this bill".
'Tories are a broken shopping trolley'
In his own speech to the conference in Brighton, Clegg gained possibly his biggest round of applause when he rejected a proposal by home secretary Theresa May yesterday, in which she said the option of leaving the European Convention on Human Rights should remain "on the table".
"Well, I tell you, it won't be on the cabinet table so long as I'm sitting round it, conference, make no mistake," Clegg said.
He delighted delegates with his description of the Conservatives as a "broken shopping trolley" that always veered to the right.
"The Conservative party knows it needs to stay on the centre ground to have any chance of speaking to ordinary people's concerns. At least the leadership seem to," he said.
"But they just can't manage it, no matter how hard they try. They're like a kind of broken shopping trolley. Every time you try and push them straight ahead, they veer off to the right hand side."
Clegg said the party's recent victory in the Eastleigh by-election proved that being in coalition with the Tories could serve their advantage.
He made it clear the party will fight the next election using the slogan of "a stronger economy and a fairer society".
"What's the only thing as unlikely as the Tories delivering a fairer society?" he asked, before answering: "Labour delivering a stronger economy."
In a veiled reference to the secret courts vote, he urged his party to keep up the "magnificent resolve and unity" it had shown over the past three years, but he made no other reference to civil liberties in his speech.
The party's rejection of secret courts reaffirms a decision taken at the conference six months ago, and suggests the rift is widening between Clegg and his libertarian wing. But Clegg said the Lib Dems were no longer a "party of protest" but one of government.
And he acknowledged the "quiet fears" of some Lib Dems that forming a government with the Tories had harmed the party, but predicted the risk would pay off in May's local elections and the general election in 2015.
"The longer you stand side-by-side with your opponents, the easier your differences are to see," Clegg said. "We don't lose our identity by governing with the Conservatives - the comparison helps the British people understand who we are."
Referring to Eastleigh, he said: "The odds were stacked against us. A fierce campaign, under a national spotlight, dogged by difficult headlines from day one.
"Extraordinary circumstances. Yet we still won."