Liberal Democrat MPs are prepared to sabotage a key plank of the Coalition agreement unless rebellious Conservative backbenchers back down and support a fully elected House of Lord’s, the party’s president suggested yesterday.

Tim Farron told The Independent that the Liberal Democrats would find it impossible to back Tory proposals to reduce the number of MPs is the House of Commons unless Conservative MPs backed his party’s plan for a fully elected second chamber.

The open warfare between backbenchers in both parties is another headache for David Cameron as he struggles to regain the initiative following last month’s budget.

On Thursday he faced unprecedented display of hostility from up to 70 of his own MPs who warned him they would rebel over Lords legislation which is expected to form the centre-piece of the Queen’s Speech.

A number of ministerial aides indicated they would rather resign than support legislation for a largely- or wholly-elected upper chamber, which they say could threaten the primacy of the House of Commons.

However Mr Cameron needs Liberal Democrat support to push through plans to reduce the number of seats in the House of Commons by 50 and re-draw the boundaries to more accurately reflect current demographics. Polling experts say such a move would provide a significant boost to Conservative electoral prospects in 2015.

However some Tory MPs whose seats face being abolished in the boundary review may not be unhappy – on personal grounds – to see that legislation fall as well.

Speaking to The Independent Mr Farron said Liberal Democrat support for the change was not unconditional.

“The Conservatives need to remember that if they don’t keep their part of the bargain then, of course, boundary change should not happen,” he said.

“If Mr Cameron wants them (the changes) the whole set of constitutional reforms set out in the Coalition Agreement need to be implemented.

“You can’t have a situation where you enact the parts that you like and ignore the rest.”

While the Liberal Democrat leadership insisted there was no quid-pro-quo between the two issues they may not be unhappy be the stance of their backbenches.

Ed Milliband yesterday added to the Coalition’s problems when he said Labour would support proposal for any reform to be put to a national referendum.

Speaking while on a local government election campaign in Merthyr Tydfil, south Wales, today, he said: “A referendum on the issue is a good idea. I don't quite understand why the Government is setting its face against giving the people a say.”

Both Mr Cameron and Mr Clegg are opposed to the idea of a referendum which they fear could push back the proposals until after the next election. They argue that House of Lords reform was in all three main party’s election manifestos so they have a clear mandate for change.

Downing Street said David Cameron remained committed to reform of the House of Lords.

”Both the Prime Minister and the Deputy Prime Minister are committed to Lords reform,“ a No 10 spokeswoman said.

She added that all members of the Government would be expected to support the legislation when it comes to Parliament.

”If it is Government policy, one expects the Government to support it,“ she said.

She said ministers were ”not persuaded“ by calls for a referendum on the issue.

But the Conservative MP Peter Bone said House of Lords reform was “a huge problem” for the Prime Minister.

“It certainly could bring the coalition down, though whether it will I don't know,” he said.

“The one thing the Liberal Democrats are demanding is Lords reform because Nick Clegg has failed on everything else, and if he gets this then he will go down in history as the Liberal leader who achieved something they've been trying to do for 100 years.

“Presumably there will be some sort of sweeteners, and the Prime Minister will say we will reach some sort of compromise.”

A Coalition divided

“What Conservative MPs are angry about is that Nick Clegg’s Bill [will] create in effect a new House of Commons to be elected by proportional representation. Less than a year ago, the British people rejected PR in a referendum.”

Eleanor Laing, Tory MP for Epping Forest

“Conservatives also told the voters at the last election that they would ‘work to build a consensus for a mainly-elected second chamber... The public should be able to choose the people who make the laws we all have to obey.”