As party gathers for annual conference, leader says he has been impressed by PM's pragmatism and flexibility

Nick Clegg will launch a heartfelt appeal to Liberal Democrats to finally embrace David Cameron's centre-right party as he predicts that together they can become a "great, great reforming government".

In terms that may deepen unease among Lib Dems unhappy with the coalition, Clegg uses an interview with the Observer to heap praise on Cameron as a "big politician" who fully understands how to share power.

As his party gathers in Liverpool for its annual conference, Clegg admits he was completely wrong to call Cameron a "fake" and a "con" during the election campaign and has been impressed by his pragmatism and flexibility. "He hasn't been dogmatic. He hasn't been doctrinaire," he says. "I think this government definitely has the capacity to be a great, great reforming government."

The Lib Dem leader's central message is that the coalition can only work if his own party accepts it is a full and willing participant that jointly "owns the government". The alternative, he says, is to operate in an atmosphere of "poison" as a competing faction "constantly trying to put little trophies on the mantelpiece to show we are winning victories".

He adds: "In fact the truth is much more radical than that. All the big decisions are jointly taken by David Cameron and myself … that is why I didn't want to have a department, why I am a hop and a skip from his office."

With the Lib Dems' poll ratings on the slide, Clegg is under pressure to convince activists that his party will emerge with its own identity from a five-year coalition with the Tories. Lib Dem delegates are expected to offload their frustrations over a series of coalition policies that they feel are being driven too much by Conservative dogma, including those on education and NHS reform.

Many on the left of the party – including party grandees such as former leader Charles Kennedy – are likely to be further troubled by Clegg's message that under his leadership the party is no longer a natural home for disaffected Labour supporters.

"Clearly there is a chunk of people who, I totally understand, turned to the Liberal Democrats at the height of Blair's authoritarianism and his fascination with [George] Bush and [Dick] Cheney," Clegg says. "They said, 'Aha! These Liberal Democrats, they are the leftwing party I want. They are the leftwing conscience of the Labour party that I want.

"That was always going to unwind at some point, particularly when Labour went back into opposition and started sloganeering leftwards. Because the vocation of Liberalism is not to be a leftwing ghetto for people disaffected by the Labour party."

Kennedy apologised after failing to attend the first major set-piece event of the conference, where he was due to appear with Clegg on Saturday evening at an electoral reform rally. The former leader blamed transport arrangements, but stressed how proud he was of the party and of Clegg's performance.

Party morale will be dented by news that more than half of those who voted Lib Dem at the election now believe the party has "sold out". According to a poll for the Independent on Sunday, two-fifths would also have voted differently if they had known in advance about the coalition deal with the Tories.

Opening a rally to promote voting reform, Clegg said that the party faced a "long road". But Lib Dems could be proud of delivering truly liberal policies during their four months in the coalition. "We are achieving some great things already in this government. Lifting hundreds of thousands of the lowest-paid workers out of tax altogether. Restoring and protecting civil liberties." He added: "I hope each and every one of you is as proud as I am of what we have already achieved."

Meanwhile extraordinary new details of how Clegg negotiated the coalition deal with Cameron in the days following the election are revealed tomorrow by the Observer's chief political commentator, Andrew Rawnsley, in two additional chapters of his book, The End of the Party.

On the Tuesday after the election, Clegg rang repeatedly to beseech Brown to stay put, telling him: "Gordon, this isn't over yet." He also demanded more time to negotiate with the Tories.

"Time for what?" demanded Brown. "Unless you can tell me you've broken off talks with the Tories in favour of discussions with us, I'll assume you're going with the Tories. I can't wait any longer. I've got to go to the palace."

Clegg insisted that a deal with Labour was still in play. "I can't be rushed," said Clegg, before asking for another three hours. "I'll give you half an hour," Brown replied. Clegg rang again. "Can I have five minutes more?" he asked. "Fine," said Brown. "Five minutes." When Clegg rang back asking for another extension, he said: "Please don't resign. Please don't go to the palace." Brown was adamant. "You've made your choice. I'm not going to hold on."

Clegg persisted. "You can't resign," he said. "This is absurd."