Change UK's faltering European election campaign has suffered another blow, after its lead MEP candidate in Scotland quit the party's campaign to endorse the Liberal Democrats.

Lib Dem sources told the New Statesman that David MacDonald, who topped Change's three-strong list north of the border, had come to believe that their party's strong showing in local elections and polling surge proved they were the strongest force pro-Remain force standing on 23 May.

His departure means Change has lost two lead candidates in Scotland in the space of a month: its first choice, former Labour staffer Joseph Russo, was forced to quit over offensive social media posts.

But much more significant than any embarrassment MacDonald's defection will cause is the deeper electoral questions it speaks to. For Change, a Lib Dem revival – which fatally undermines its claim to be the best-placed party to beat Nigel Farage – was not part of the plan. Indeed, they believed their rivals' brand to be so tarnished as to allow them to muscle them out of the market.

MacDonald's decision to quit illustrates the extent to which the opposite is now true: in a letter to Anna Soubry this morning, he says that, on most issues in general and on Brexit in particular, Change's platform is indistinguishable from that of the Lib Dems. Only, now the latter is best placed to win.

That truth is reflected in Change's public and private response to this morning's news. "It is obviously disappointing that this candidate has chosen to pledge allegiance to another party – he has let down his fellow candidates and activists," Chuka Umunna, its spokesman, said. "But we are focusing all our efforts on adding to the Remain vote in the UK and challenging the pro-Brexit Tory, Brexit and Labour parties, which is why our leader challenged Nigel Farage to a live TV debate this week.

"In the past 24 hour’s Labour’s former head of campaigns for the the North of England has come out for Change UK, as have many former Labour voters. Winning voters over from the main parties and growing the Remain vote across the UK will continue to be our focus."

Privately, senior Change sources are even franker in their dismay. They blame the Lib Dems for "reinforcing the sense that Remainers are squabbling amongst themselves and not taking the fight to Farage, May and Corbyn". They also draw an unfavourable contrast between this morning's events and their endorsement of Lib Dem and Green candidates in the local elections.

Their complaints are not entirely without substance. But the problem is that they are unlikely to get much of a hearing, as the shift in how Change defines its electoral objective since its campaign launch shows. Where then they disregarded the Lib Dems and Greens as "the smaller ones" and made an unapologetic pitch for first place among Remainers, now the emphasis is on securing a bigger aggregate vote for pro-EU parties.

That gambit lacks the self-confidence of their early days – and is essentially a tacit admission that Change is now one of those "smaller ones". More significantly, it reflects the more uncomfortable truth of the Lib Dems' dominance. Those who wish to see a greater aggregate vote for Remain, like MacDonald, have increasingly little reason not to opt for its biggest and most successful advocates – who, after 23 May, are likely to hold the upper hand in a way Change never foresaw.