The former Liberal Democrat leader Paddy Ashdown has launched an explosive attack on George Osborne, accusing the chancellor of cheap mud-slinging and scaremongering ahead of the alternative vote referendum.

As the AV debate grows increasingly acrimonious, laying bare growing coalition tensions between the Conservatives and Liberal Democrats, Ashdown takes Osborne to task over his allegations that the Electoral Reform Society stands to profit from a yes vote.

Osborne claimed the society, which gave £1.1m to the yes campaign, would benefit from the adoption of the alternative vote system through its commercial subsidiary, Electoral Reform Services Ltd (ERSL). But in a strikingly personal attack on the chancellor, Ashdown writes in today's Observer that Osborne's approach is a prime example of why British politics needs radical reform.

"The strategy is clear," writes Ashdown. "Throw as much mud as you can, don't let the issue be discussed openly and frighten the public over the next three weeks into voting to preserve the power the present first-past-the-post system gives you. This strategy stinks of the same odour which has surrounded our politics recently.

"For the chancellor of the exchequer – the chancellor of the exchequer – to claim that there is something 'dodgy' about the Electoral Reform Society donating cash to a campaign in favour of electoral reform is bizarre. George Osborne makes the case for change for us. He graphically shows why we need to change our politics. Why we need to clean it up. Why the voting public deserve something better."

Ashdown's aggressive intervention is made as the gloves come off in the increasingly embittered referendum debate. Twelve Tory ministers and cabinet ministers, including key allies of David Cameron, pounded pavements across the country drumming up support for the no vote which a Comres poll last night said had a 6% lead on the yes vote, with 43% supporting the retention of first past the post.

Nick Clegg, the deputy prime minister, condemned the use of smear campaigns during the AV debate and attempted to distance himself from Tory policies. "The no campaign is getting increasingly desperate," the Lib Dem leader said. "That's why they are using ludicrous false claims to try to scare people into keeping things the way they are."

Clegg added: "Working together in the national interest does not mean we agree on everything. And it doesn't mean we shouldn't be taking the fight to the Tories in the local elections, criticising mistakes and wrong priorities wherever they occur."

Meanwhile, the former Lib Dem Treasury spokesman, Lord Oakeshott, said that the no campaign was a "Conservative front". He urged Labour party supporters to ignore the no campaign of the former deputy prime minister, Lord Prescott, and vote yes with the Liberal Democrats and Labour leader Ed Miliband, to "stuff the Tories".

Oakeshott said: "The no campaign is a pantomime dinosaur, with Prescott at the front, [BNP leader Nick] Griffin at the back and Cameron firmly on top all the time. The stakes couldn't be higher on 5 May – a yes vote will empower the progressive majority in our country. A no will let the Tories in through the backdoor to dominate the 21st century like the 20th."

Friction between the coalition partners comes amid growing frustration on the part of those closest to Clegg that the no campaign has been used to attack the Lib Dems, and the deputy prime minister in particular. Clegg's image is prominent in the no campaign material.

A senior Lib Dem source told the Observer the personal attacks appeared to have been sanctioned from Downing Street. The source added: "The no campaign has been turned into an avenue through which the Tories can attack Nick, let off some steam. The campaign has been funded heavily by Conservative headquarters and the attacks have become very personal. It is like a pressure valve for the Tories for their frustrations in other policy areas."

The energy secretary, Chris Huhne, has warned that negative campaigning by the Conservative chairwoman, Baroness Warsi, among others, could lead to a breakdown in the coalition. Ashdown explicitly criticises Warsi.

"To have Baroness Warsi stand on the site of race riots in the 1930s and say that a yes vote will help the BNP is as tawdry as it is indefensible", he says. "The BNP are campaigning for a no vote. Such extremist parties as have, God help us, been elected in Britain, were elected through first past the post. As a host of independent commentators have commented, AV will diminish their chances, not increase them."