Steve Richards: They have so much political space, but has anyone seen the Liberal Democrats?

A third party has never had it so good - and yet it is in the political doldrums

The surprise winners for the poorest performers are the Liberal Democrats. They win by a considerable margin on the grounds of virtual invisibility at a time when a series of unrelated events conspire to give them an unprecedented amount of political space. That is the surprise.

A third party has never had it so good and yet it is in the doldrums. The Conservatives are looking inward as a result of their never-ending leadership contest. The tensions within the Government are high, even surfacing at normally docile Cabinet meetings. At the most recent Cabinet meeting, last Thursday, John Prescott had another spat with Ruth Kelly over schools' reform and the Health Secretary, Patricia Hewitt, vented anger at the way her proposals were being presented simplistically as "market-based" solutions. This may sound fairly tame, but is the equivalent of a ministerial civil war compared with the Cabinet meetings in the first two terms.

Unusually, the two main parties are in the midst of internal crises at the same time. In the gap, the third party is nowhere to be seen.

This is not the only lost opportunity. The policy areas that have acquired greater prominence since the election play to the theoretical strengths of the Liberal Democrats.

In different ways and to a varying extent, civil liberties, environmental concerns and electoral reform have soared up the political agenda without the Liberal Democrats needing to do very much. External events did the work for them. What is odd and perverse is that the Liberal Democrats made few waves once these issues had become major national talking points.

Instead, the party is battling with divisions over its ideological direction. Most of the party's members are social democrats. They would be at ease working with the modern Labour Party if it were not for tribal affiliations.

A minority of Liberal Democrats seek a smaller state and a radical upheaval of public services. This group would find much in common with the Conservatives' Oliver Letwin and Labour's Alan Milburn. Although small, the group of reformers is well represented in the parliamentary party.

Such internal divisions are not necessarily fatal. They mirror similar divisions in the Labour Party. But any divide has the capacity to undermine or destroy a political party unless it is managed carefully.

As leader of the Liberal Democrats, Charles Kennedy faces two almost contradictory challenges. He needs to keep a divided party on the road, as united as it is possible to be. This involves stealthy and subtle leadership. At the same time, he needs to lift the profile of his party from near invisibility to one in which it is a noisy part of the political scene. When a party is split, invisibility can help. Neil Kinnock would have given a lot for Labour to have gone through a phase of invisibility in the 1980s. But a third party needs to make itself felt on the national stage. Even if there are internal tensions, invisibility is not an option.

Kennedy is brilliant at meeting the first of the challenges. He keeps that show going in a way that some of his critical colleagues underestimate. Only last weekend, he gave a newspaper interview that changed significantly his party's approach to taxation. Kennedy suggested that at the next election he would not be advocating a higher level of overall taxation than the Government. He signalled the change without causing a fuss even though there is a section of his party that believes passionately in the existing tax policies. But the price of stealthy policy change is that the Liberal Democrats are not noticed. Kennedy lies low and most of his party follows this lead.

They are functioning, of course. On several of the policy areas that have risen up the agenda, they take a distinct and strong line. In addition, they are holding a policy review, although some senior insiders are gloomy about its stuttering progress. But the Liberal Democrats should be everywhere during the periods of stormy introspection in other parties, making speeches, writing articles and devising any means possible to be noticed even if that risks occasionally negative publicity about splits and divisions. This is where Kennedy has been weak. When rare space opens up in British politics, he tends to fall through it.

Leading a third party is not easy. Most of the time, national media attention is elsewhere. In recent decades, the third force has acquired relevance in a significant way on four occasions.

In the early 1980s, the SDP/Liberal Alliance seemed briefly to have almost unstoppable momentum behind it. This took place during a period, like now, when the main parties were looking inwards. Nearly 10 years later, during the rows over the Maastricht Treaty, the Liberal Democrats played a pivotal role as John Major struggled to get the legislation through with his small majority.

With the rise of New Labour, it appeared for several years as if the Liberal Democrats would be partners in a new progressive alliance. And during the Iraq war, they mattered once more in a very different context, the only party in parliament to oppose the conflict. In each of these cases, the third party made the most of the rare national opportunities that opened up to them.

They have not done so since the election and inevitably there are noisy whispers about Kennedy. There are a significant number of new, talented MPs who have given up rewarding jobs to pursue a parliamentary career. They are not going to tolerate near invisibility for much longer. Some senior MPs are making provisional plans in case a vacancy for the leadership arises sooner than expected. MPs are talking about the possibility of a new leader, a symptom of unease and a sign that there is more turmoil to come.

But a new leader would struggle, too. The last election was the best opportunity for the third party for decades. It will be much harder next time. For the Conservatives, David Cameron will head for the political centre ground as he enjoys a dizzying political honeymoon. At some point, Gordon Brown will take over from Tony Blair, tempting back the anti-Blair Labour supporters who voted Liberal Democrat at the last election. Soon there will be much less space for the third party, whether or not it has a new leader.

This has been a bleak period for Liberal Democrats, but it is probably the best it's going to get in this parliament.

s.richards@independent.co.uk