Despite all that rain, the story of this strange, unpredictable, up-and-down summer has now been established: it is all about the Olympics, and millions of people's delight in how well they are going. In an age as fragmented and individualistic as ours, to talk about the country as if it was a single human being – "a nation rejoices", and all that – can easily seem misplaced, and to go on about sporting successes as if they make any difference to our grim economic predicament is plain silly. Nonetheless, Ennis, Farah, Murray, Wiggins and the rest are certainly cheering us up, and the organisational triumph has provided a counterpoint – if only temporarily – to the sense that Britain is declining, at speed.

But what is going on with the government? In the lead-up to the Games, a lot of people held fast to the assumption that if everything went according to plan, the coalition would reap the benefits. But look what has happened.

The fact that the prime minister has been in the crowd when aspiring British medal-winners have lost out has sparked talk of the "curse of Cameron". The one Tory politician who has done well out of the Games is Boris Johnson, credited with a magic touch the PM cannot match, and talked up not just as the next Conservative leader, but a shining saviour. The exit from politics of Louise Mensch means a byelection the Tories are 99% certain to lose. As the Lib Dems' fate seems to grow grimmer by the day as they cling on to the coalition, but apparently run of out of reasons for doing so, beyond the imperative to avoid an election, lest they be completely wiped out.

Electoral reform, a cause wired in to the party's soul, was killed last year in the referendum whose often nasty tone marked the end of the idea that Nick Clegg and David Cameron were blissfully happy partners, tied together in a shared political project. Never mind, went the line dispensed by the party leadership: the prospect of a democratic(ish) House of Lords would seal the idea that, despite their political pain, the Lib Dems were pulling Britain in a progressive direction. But that dream died on 10 July, the night that 91 Conservative MPs voted against Clegg's changes to the upper house – which led in turn to Cameron U-turning on his plan to somehow keep the plans alive, and serving notice at the height of Britain's Olympic raptures that the plans were dead and buried.

Now, there comes proof that if the country seems amazingly united, the face the coalition is presenting to the world is one of division and disagreement. On Monday, Clegg accused his political partners of bad faith and said that the Lib Dems would be getting their own back. "Part of our contract has now been broken," he said, and announced that his party would oppose the Tory plans to reform constituency boundaries – which, by some estimates, would have brought the Conservatives as many as 20 MPs (and lost the Lib Dems at least a quarter of theirs). The Guardian's report of his press conference said he looked "subdued and depressed", which was true, but not unexpected: as anyone who tunes into Prime Minister's Questions will know, Clegg has been looking subdued and depressed for months.

Yesterday, Cameron said he would press on with his plans for redrawing Britain's electoral map. "I think everyone should come forward and vote for that proposal because it is a very sensible proposal and it will be put forward," he said. Quite what will happen if the Tories put it on the parliamentary timetable and the Lib Dems want no part of it remains unclear.

Meanwhile, the dysfunctional rumblings within the coalition go on. Having claimed that "the worship of youth is subsiding", Vince Cable is being talked up as a replacement for Clegg. In Tory ranks, there are mutterings – off-the-record for the moment, and perhaps more about tactical positioning than serious proposals – about explicitly challenging the Lib Dems to support the boundary changes, and going for divorce and minority Conservative government if they do not. Some Tory voices want a new coalition agreement, focusing on such areas as education reform, welfare, and tax cuts for low earners; others want out, and fast.

Everything seems to be in a mess: what, you wonder, could tie the two coalition parties (and their warring internal factions) together, so as to see out the next three years? To use a sporting comparison, the government currently resembles a relay race in which the runners are not only sprinting in different directions, but repeatedly tripping each other up.

"The coalition is for five years and it will still do five years," a very senior Lib Dem tells me, though he warns of more noise to come, chiefly from the Tory side. "The Tories have much the biggest problem: a group of people who will vote against anything, and will continue to do so – on Europe, on some parts of economic policy, on constitutional reform."

"There will be continuing voices who are basically anti-coalition," he goes on, mentioning a Tory backbencher called Peter Bone, who was recently heard making the case for a minority Tory government, issuing a tantalising rallying call to Tory activists: "Without being shackled to the Liberal Democrats we could introduce real Conservative policies relevant to the nation."

But the fact that the Tories are best served by staying put, this source says, is underlined by the opinion polls. "If there's an election, they're hardly going to romp home. And even if they managed to carry on as a minority government, we'd obviously have an influence on that in terms of votes in the Commons." In short, he reckons, the Tory leadership are as glued into the coalition as the Lib Dems are, and until the "last realistic moment" – which, he says, "could be two weeks before the next election, or six weeks" – everyone will have to hang in there.

Fixating on Clegg's predicament – and, indeed, simply looking at his face – it is easy to think most of the coalition's pain is felt on the Lib Dem side. But on Monday, as it became clear that the boundary reorganisation was dead, the influential Tory activist and commentator Tim Montgomerie said what had happened was the "single worst political event to hit the Tories since 1992 and black Wednesday". Without it, he pointed out, the Tories would need an extra three percentage points on their national lead at the next election – which, he said, "is not a small amount. It's not much less than we gained from the whole 2005 to 2010 effort."

One Tory cabinet minister and Cameron ally sounds a note of similar alarm. "The truth is that what's happened has been quite bad for the Conservatives," he says, and cites two big reasons: not just the uncertain fate of the boundary review, but the fact that large numbers of Conservatives have been visibly defending an unelected chamber and "gilded earls" – "not a good look," he says.

He also has a pop at those noisy Conservatives who amount to the Tory equivalent of "Trotyskist impossibilists", making trouble for the coalition, and Cameron in particular. Sooner or later, he implies, it might be time for Tory modernisers like him to start "remaking some of the arguments we made in opposition" and putting jump-leads on the kind of touchy-feely Toryism that reached its peak in around 2007 – which cuts to the heart of what a mixed-up business coalition is. That would ease the pain of the Lib Dems, but annoy the Tory right no end. Whatever happens, though, he thinks the coalition will prevail. "It'll probably get more difficult towards the end," he says, "but it'll still be here."

Nick Boles is another high-ranking comrade of Cameron, the MP for Grantham, the birthplace of Margaret Thatcher – and the author of a short book titled Which Way's Up?, published in 2010. It ruffled Tory feathers by making the case for an electoral pact with the Lib Dems – and, if a Tory-Lib Dem alliance was returned to power, the continuation of the coalition beyond the next election. "I don't think that idea ever got anywhere, really," he says, with a dry laugh. "Mainly because Clegg ruled it out pretty emphatically at the time." But looking at the two parties' current predicament, he reckons that recent events have drawn them nearer, rather than blowing them apart.

"Emotionally, things are a bit raw," he says. "But in terms of self-interest, the two parties are bound together far more than they were the day before yesterday. The Liberal Democrats aren't going to have anything to show on constitutional reform, which is one of their biggest priorities – and we're not going to have a boundary change, which would have reduced the lead we need to form a majority government.

"If House Of Lords reform had gone through, you could have imagined the Lib Dems saying, 'Well, we've got a major achievement – now we're going to leave the coalition and start profiling ourselves as an independent party.' And if we'd got the boundary review, we could have said, 'Now, we're not so worried about a quick election, because we've got more chance of winning it.' But neither of those things are true, and we're thrown together more."

He believes there is a good chance that the partnership will have to be resumed after the next election. "Right now, given the changed map, that's probably the most likely option for remaining in government as Conservatives," he says. "Which is depressing, because I want us to govern alone."

A strangely similar set of opinions is dispensed by the Lib Dems' deputy leader, Simon Hughes, charged with the responsibility of maintaining a separate Lib Dem identity while making the case for coalition, and keeping his activists' morale up – a difficult trick.

"The options for the next three years are a Tory minority government or coalition with us," he says. "What we're there to do is to make sure that as we try to get out of the difficult economic situation, we absolutely concentrate on jobs, training, skills and bringing down unemployment – and that we do more state intervention to deliver that. We have to end the scandal of bonuses, and abuses of public sector pay … and thirdly, we have to be seen to be the people who, on a whole range of things, are fighting for a fairer Britain." He mentions building more houses and opposing more welfare cuts – the latter, surely, the kind of suggestion guaranteed to make hard-core Tory blood boil.

How could the Lib Dems do that when a large swath of the Conservative party is baying for the leadership to take pretty much the opposite course?

"The leadership of the Tories knows there is no alternative to the coalition for the rest of this parliament," says Hughes. "So there's a chance we could do quite a lot of it – because it's appealing to the public. The public are willing to have austerity, but they want some balance, things that show that we're closing the gap between rich and poor. The Tories at the top understand that."

Looking ahead to 2015, he sees the chance of the Lib Dems once again in coalition with one of the two bigger parties as a prospect to keep his party's spirits up. "All the research suggests that there is as good a chance of us holding the balance of power again," he says, echoing Nick Boles' prediction of another Tory-Lib Dem coalition in three years' time. "And the opportunity of being able to choose who our partner would be is phenomenally encouraging for the troops."

But not, perhaps, the rest of us. Five more years of marital blow-ups, mutual accusations of betrayal, furious backbenchers, and "subdued and depressed" leaders – with continuing austerity, and not even a homegrown spectacular like the Olympics to cheer us up. Don't say you weren't warned.