BRISTOL (Reuters) - Liberal Democrat activists have dismissed talk the party should quit the year-old ruling coalition if they suffer defeat in a referendum and local elections this week.
Support for the party has slumped since it entered coalition with the Conservatives last May in an alliance that has made cutting the budget deficit its priority.
Voters now appear set to punish the Lib Dems for the coalition's austerity policies in elections on Thursday for local authorities across much of England.
The party risks losing control of a number of major cities, eroding the power base that helped it to grow in influence in recent years.
However, activists in Bristol, a party stronghold, said staying with the coalition for its five-year term was the right option -- a view likely to reassure markets who want to see Britain's books balanced.
"It's pretty rocky going at the moment, but I'm not for jumping ship at this point," said Bev Knott, a Lib Dem councillor in Bristol.
The party has run Bristol since 2009. Lib Dems in the city are pinning their hopes on a campaign highlighting their track record on local services after taking over from a minority Labour party administration.
Party leader Nick Clegg emerged as the unlikely star of last year's national election campaign -- coming across as a fresh new face in televised leadership debates.
However, Clegg's image has been tarnished by coalition compromises, most notably the decision to treble student tuition fees despite campaigning against them.
Bristol law student Darius Jafari voted for the Lib Dems last year but said he was disillusioned with Clegg.
"I was like most people before the election thinking: wow, (Clegg is) new, young, has modern ideas, quite left leaning, seems to be quite genuine," said Jafari.
"Two months later it all seemed completely different. Just how many promises can you break?"
Barbara Janke, Lib Dem leader of the Bristol council, says there has been a backlash because of the coalition.
"I've had people say: never darken my door again, because we didn't vote for you to be in (government) with the Conservatives, but certainly nothing like as many as we had been led to believe," she told Reuters.
Analysts say the Lib Dems have little choice but to stick with the coalition because they could be wiped out in a fresh general election.
Differences between the Lib Dems and their Conservative partners have been heightened by a referendum on Thursday on electoral reform.
The Lib Dems want a change to a system more favourable to smaller parties while the Conservatives oppose it. The change appears unlikely to pass, adding to pressure on Clegg.
Clegg said he believed the coalition would change over time.
"I always felt that the first phase of this coalition government for the first year as we were taking really difficult decisions on the deficit and so on required a real collective discipline," he told BBC Radio.
"Over time inevitably the different identities and different values of the two parties ... will come out in the wash a bit more, and I think that is probably happening in part because of this referendum," he added.
(Editing by Steve Addison)