Sir Vince Cable has ruled out ever leading his party into a formal coalition with a Jeremy Corbyn-led government, a move he says would be just as “appalling” as working as junior partners in an administration run by Boris Johnson.

The Liberal Democrat leader – who would have preferred to have joined forces with Labour under Gordon Brown rather than David Cameron’s Tories in 2010, had the parliamentary arithmetic allowed – used an interview with the Observer to suggest that Lib Dems could instead work together with disgruntled Labour MPs. He says the latter are planning to leave the party in droves if Corbyn becomes prime minister.

Speaking on the eve of his party’s annual conference, which opens on Sunday in Brighton, Cable suggests he has already held discussions with disaffected Labour members about joining what he has called a new “movement for moderates” on the political centre ground. “If you talk to a lot of Labour backbenchers they just can’t, they’re not willing under any circumstances, to countenance a Corbyn government. It is quite extraordinary, that. Few of them say it publicly but most of them say it privately,” he says.

Many of this group, he adds, are actively thinking about what career paths to take next. “That’s what a lot of them are doing. I talk to people in the charity world who tell me they’re being buried in CVs from Labour MPs.

“They’re just getting out while the going is good. But if they formed a coherent group, I’ve said that whatever happens with our internal reforms, I want to work with them. There’s no point slitting each other’s throats.”

With just 12 MPs, and poll ratings struggling to move upwards (the Lib Dems are on 7% in Sunday’s Opinium/Observer poll), Cable is seeking a new mission for his party and his leadership as it draws to a close. Recently he announced that he would step down when Brexit was “resolved or stopped”, and outlined plans to allow non-MPs to enter the race to succeed him. Cable, 75, also said the party would allow people to join as supporters without paying fees, in an attempt to reinvigorate it and place it at the heart of the centre-ground movement he seeks to build.

Vince Cable and his wife Rachel Smith arrive in Brighton for the Liberal Democrats conference. Photograph: Gareth Fuller/PA

As business secretary, Cable was a key figure in the coalition government from 2010 to 2015. Looking back, he has no regrets about teaming up with the Tories in the national interest, despite the punishing electoral consequences for his party. “I don’t think we had an alternative,” he says. “It may sound a bit deterministic but I think the very odd combination of numbers combined with the financial crisis and people out there saying the whole bloody place is going in flames. [In those circumstances] you can’t just sit there engaging in parliamentary games.”

Now, however, despite Brexit and his fear that there could be another economic crash, Cable says the most he can see his party agreeing to, were there to be an election soon, is an arrangement under which Lib Dems would work with Labour or the Tories on individual issues. Coalitions look out of the question. “They’re both pretty appalling in different ways ... They’re both equally unacceptable,” he says.

A year ago, before the last Lib Dem conference, Cable was on strikingly optimistic form, telling this newspaper he believed there was a decent chance he could become prime minister, so unpredictable was politics. His decision to pre-announce his own departure a few weeks ago, however, was confirmation that reality has dawned. He now seems to accept that the job of leader has proved more difficult than he expected.

Above all, he says, it is hellishly hard work getting noticed as the leader of a small, moderate, third party, however hard you try. “I mean, I remember 10 years ago when I was acting leader I had two questions a week in prime minister’s questions. I am now allowed one every four weeks. That is what the speaker judges we deserve. And on the back of that I had a Sunday newspaper column ... It is more difficult.”

Jo Swinson with her 11-week-old son at a Commons debate. Photograph: PA

He tries not to sound frustrated. “It is not for want of trying, I assure you, and certainly I spend a lot of my time buzzing round the country. We are making headway but it is difficult.”

Cable believes the chances of a second referendum on Brexit are rising but still puts the likelihood only at around 30%. Like everything else in the debate about the UK’s future relationship with the EU, it is impossibly difficult to predict – as is the timing of his own departure as leader, or who will succeed him.

Asked if it should be a woman, Cable says: “It would fit with the spirit of the time, and there is a strong argument for doing it.” Most often mentioned is Jo Swinson, the MP for East Dunbartonshire, who made history last week by bringing her 11-week-old son into the Commons chamber for a debate. Cable says Swinson would be “good, very good. There are several others but she is an outstanding individual.”

As for when he might go, Cable says he “deliberately avoided setting out a specific time. Politics is very uncertain. Let’s assume Brexit is wrapped up by March/April next year. It may be or may not be. We then get our reforms to put through, probably in a similar time frame.

“There will be local elections in May. Then there is the likely chaotic outcome of Brexit producing a new prime minister wanting a new election. And I’m there to fight for us and lead us into it and lead us through the other side. What I said was, there are certain tasks to be done. I’m approaching this in a professional way. I’m doing my job. And then I will move on.”