Senior Liberal Democrat minister Chris Huhne has threatened legal action over "untruths" told by Conservatives opposed to the Alternative Vote system.

Mr Huhne said Tory ministers backing the No campaign undermined their credibility by making false claims about the costs of introducing AV.

He warned the row could damage the coalition government.

Foreign Secretary William Hague denied Tories had told "untruths", and said the coalition could still work well.

The 5 May referendum was a Liberal Democrat condition for entering coalition with the Tories.

But with all Lib Dems in the Cabinet backing the change and their Tory colleagues speaking against it, the two parties making up the coalition have been increasingly pitted against one another during the campaign.

Chris Huhne, who refused to rule out resigning as energy secretary over the tensions, said arguments between the Yes and No campaigns would make it a lot more difficult for the coalition to work together in the future.

'Come clean'

"It is frankly worrying if you have colleagues who you've respected, and who you've worked well with, who are making claims which have no foundation in truth whatsoever," he said.

He threatened legal action over the "extraordinary allegation" by Chancellor George Osborne that expensive new voting machines would be needed to count the votes after an election held under AV rules.

"Australia's used [AV] for 80 years without ever using voting machines. If they can't substantiate that, there's simple legal redress," he said. "They had better come clean pretty fast."

But Foreign Secretary William Hague said "there was no doubt" that having a more complicated system "would cost more" and that it was a legitimate issue to raise in a campaign.

The official No campaign also includes trade unions, sports stars and some senior Labour figures.

Former Labour Home Secretary David Blunkett, who is campaigning against AV, agreed the system would cost more in the long term, although he refused to specify a figure.

"It's a great shame that this debate degenerated in the way it has," he said, "because this was an opportunity... to lift people's horizons out of the mire of simply slinging mud at each other."

Inventing facts

Earlier, Lib Dem deputy leader Simon Hughes said he would complain to the Electoral Commission about the Conservative party chairman, Baroness Warsi, "inventing facts".

She has said changing the UK voting system to AV would mean more legitimacy for the BNP, and would see politicians "pandering to extremist votes".

But William Hague said the baroness had been right to discuss the effect of the change on minor parties.

"Will the candidates in marginal seats have to think about how they're going to get the second, third and fourth preferences of people who have voted for the BNP?"

He added: "These things are therefore not disputed facts, they're matters of opinion about the implication of AV and they should be understood as that."

The row about switching to the Alternative Vote has grown more fierce and more personal over the past couple of days.

Nick Clegg described those campaigning for a "No" vote as "a right-wing clique who want to keep things the way they are," in the Independent on Sunday.

William Hague insisted that, despite the row over AV, the coalition was working well.

"Yes, we all have strong feelings but at the end of it the coalition will work very well together as it is at the moment.

Coalition survival

"We're used in general election campaigns to accusations flying back and forth.

"In a referendum campaign feelings run high, people get excited. The important thing for people to know is that the coalition is working well together."

Both Mr Hague and Mr Hughes agreed that despite having differing views on whether to change the voting system, the coalition would survive the referendum.

But Chris Huhne said the row made life harder.

He said: "It's going to undermine the credibility of colleague ministers, both the prime minister and the chancellor of the exchequer - and the foreign secretary - if they use, repeatedly, allegations which have no foundation in truth whatsoever."

He added: "That is inevitably going to undermine their own credibility and that is not good for the coalition."

A spokesman for the No to AV campaign said senior Lib Dems were getting "more and more desperate".

He said: "We will continue to make the case for one person, one vote and urge the British people to vote against the unfair and expensive alternative vote system."