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LONDON (Reuters) - Liberal Democrat leader Nick Clegg said Wednesday that the junior coalition partner retained a viable future despite voters punishing the party for compromises during its first year in power.
Clegg took the Lib Dems into power with the Conservatives on May 11, 2010 -- forming the first coalition government since World War Two.
The government has made deficit-cutting its priority and is slashing public spending across government departments by a fifth over the next four years.
Carrying the can for cuts, the Lib Dems slumped to their worst result in two decades in local elections last week, while the Conservative vote held up.
Clegg, under pressure to defend his strategy, said the Lib Dems would trumpet their achievements in government and assert a "muscular liberalism" in what he has called the second phase of the coalition.
"We can be more assertive about our different positions on certain issues, but without threatening the stability of the government," he said in a speech to Lib Dem activists in London.
"In the next phase of the coalition, both partners will be able to be clearer in their identities, but equally clear about the need to support government and government policy.
"We will stand together, but not so closely that we stand in each other's shadow. You will see a strong liberal identity in a strong coalition government. You might even call it muscular liberalism."
Analysts say they believe that neither of the coalition parties will desert the alliance in the short term, because opposition Labour is ahead in opinion polls.
However, heightened coalition tensions could slow policymaking and lead to more public confrontations.
A YouGov poll for Channel 4 News showed 52 percent of more than 500 current and former Lib Dem party members believed the coalition would collapse before the next parliamentary election due in 2015, and 35 percent thought Clegg should go before then.
But nearly two-thirds thought the party should try to stick it out for the agreed five years.
Chancellor George Osborne, a senior Conservative, said Wednesday that the coalition was as committed as ever to slashing a record budget deficit.
Clegg's critics say last week's local elections and failure to secure electoral reform show he risks leading the party, long shut out of power by the Conservatives and Labour, back into the political wilderness.
Clegg, the deputy prime minister, said he saw a political recovery by the next general election.
"At the next election we will say that we are demonstrably more credible on the economy than Labour, and more committed at heart to fairness than the Conservatives," he said.
"I am confident that showing we can combine economic soundness with social justice -- competence with a conscience -- will make us an even more formidable political force in the future."
Additional reporting by Matt Falloon and Avril Ormsby; Editing by Elizabeth Fullerton