Nick Clegg has a hinterland. After Sir Menzies Campbell’s abrupt departure as leader of the Liberal Democrats in October 2007, the sudden front-runner left his buzzing Westminster office for his family home, where he found his young son had rather different priorities.

“My head was spinning and I thought, ‘What am I going to do next?’,” Clegg tells me. “And my four-year-old, the only thing he cared about was he wanted me to find his leopard – he had this little spotted leopard – and I spent half an hour looking under the sofa, in every box, drawer, under the bed, to find this leopard.”

Clegg’s aides say that the 42-year-old party leader regards time spent with his children – three boys aged seven, five and four months – as “sacrosanct”. It includes taking them to school every morning and tending to the latest arrival in the middle of the night. As if to prove his 24-hour schedule, when the New Statesman arrived to join him in standard class on a train to Durham this past week, Clegg was sleeping lightly.

If he is tired, his unusually high profile in recent weeks would also help to explain why. He has emerged from a damaged Westminster as the reforming politician of the moment, having delivered the fatal blow to the Speaker, Michael Martin. His party’s long-held agenda for constitutional change, from electoral reform to an elected upper house, is now being debated in cabinet.

At what point did he decide to become the only party leader to risk a call for the Speaker to stand down? “Quite late, actually, on the Saturday night, before I said what I said on the Sunday morning [17 May].”

But that, it seems, was only the start. Clegg, who repeatedly jabs the train window in frustration, is scathing about our famous legislature. “It’s not the mother of all parliaments; it’s a ­eunuch parliament. It’s completely bereft of any ability to decide anything for itself.

“I don’t think people quite realise that people who are supposed to represent them in parliament are totally usurped by unaccountable, secretive power . . . it is unimaginably unfair, undemocratic and unhealthy.”

Members of parliament, and not just the Speaker, will have to pay the price. In the case of the worst offenders, “They are going to have their day of reckoning in the next few months and, you know, some of them may end up in court . . . for outright fraud,” he says.

But his attack on the great Westminster scandal does not stop there. Next on the agenda will be party funding. “If we don’t sort out party funding there is just a scandal waiting to happen . . . You look at the Conservatives: they blocked the most recent attempts to get a cross-party agreement on party funding reform, yet we don’t even know how they funded their last election campaign. We don’t even know whether [the Tory deputy chairman] Michael Ashcroft pays taxes here.”

Clegg’s own views on funding are influenced by the proposal made in 2006 by Helena Kennedy, the Labour peer, as part of her wide-ranging report on parliamentary reform for the Power Commission. This recommended that voters should be allowed to make small contributions to the party of their choice while voting at the polling booth.

Refreshingly optimistic, Clegg draws a crucial distinction between voter “apathy” and the reality of alienation. He thinks the former is just a “lazy, self-serving myth”, and offers as evidence the well-attended public meetings he has regularly held since becoming party leader. “Four hundred people on a dreary Thursday morning really worked up about stuff,” he says, is hardly a sign of voter apathy.

Nevertheless, it is true that “people don’t believe that mainstream politics is delivering the answers. And, of course, they believe it even less now that they’ve seen that the whole political class seems to have its finger in the till.”

All of which means that “it really is a sort of change-or-die moment. You either change and you change very profoundly, or you have, in my view, a series of hammer blows to what little is left of public confidence.”

Does he believe there may now be a chance for electoral reform, as advocated by the Health Secretary, Alan Johnson? “I’m not going to hold my breath. I’m certainly not going to hold my breath, by the way, with a Labour Party, Labour government, that is clearly on its knees, and losing moral authority by the day. The problem, of course, is that they’ve left it so late – they’ve had 12 years! – to do the progressive thing.”

There is a revealing difference in the way Clegg talks about Labour and the Conservatives. On the former, he exhibits genuine despair at lost opportunities. “A lot of people I think, quite understandably – close friends of mine, members of my family feel the same – were so excited in 1997 about the possibility of change . . . And they kind of stuck with it through thick and thin, and they seem now to be really up for doing something different.”

Which is why, although he has been criticised by some on the left for targeting Tory votes, he says: “Our growth is almost all at the cost of Labour, particularly in the urban heartland . . . The big change at the next general election will be a very significant advance of the Liberal Democrats at the cost of Labour.”

With David Cameron’s Tories, meanwhile, the gap is ideological. “My frustration with Labour, that they haven’t made this simple progressive case, is matched, I have to say, by my utter, utter dismay at the Tories.” The Conservatives’ stance on Europe leads his list of complaints. In particular, their decision to leave the main centre-right grouping in the European Parliament and their opposition to EU laws on extradition. “I mean, what planet are they on? They want to go now into bed with a bunch of serious, serial nutters for a start . . . And they are now lying to people, saying that they can help them make Britain safer, when they are not going to deal with international criminals.”

He brushes off comparisons with Cameron – “people always make characterisations” – but also goes further than ever in distancing himself from the Tory leader. “I am someone who clearly has completely different values to Cameron. I just maybe see it as so obvious that I don’t spell it out . . . You know, I didn’t spend my life hovering around the Westminster village – I’m a complete newcomer, I only arrived here in 2005. He [Cameron] was a party apparatchik, I think did some basic PR stuff for a telly company, then was back in politics again. You know, I worked as a journalist for a while, for two years I managed development aid projects in the former Soviet Union, I was a trade negotiator, and the first time I did my time [in] politics wasn’t even here, it was as an MEP. So I think I got a completely different outlook. We are completely different in where we come from in our constituencies. And also he clearly has absolutely no feel for the enormity of the task of changing politics – absolutely none at all. He hasn’t even changed the Conservatives.”

Despite all of this, Clegg repeatedly refuses to rule out a coalition with the Tories in the event of a hung parliament. “You’re asking me to choose between my despair at Labour and my disdain for the Conservatives,” he says.

Clegg certainly believes Labour’s time is up. This is because of an “identity crisis”, a void at the heart of the Labour Party, created by the departure of the domineering Tony Blair. Clegg cites the recent row over Gurkha repatriation, and the government’s slow response to the problem, in order to make a wider point. “I actually think, personally, it’s indicative of this loss of identity . . . You know, I think a party secure in its own identity would have reflexes which would kick in much more quickly.”

“I think Labour has to go into opposition before it reinvents itself,” Clegg tells me. So is he saying Labour will lose? “Yes.” But presumably he isn’t saying the Tories will win. “No! Quite the reverse; I think it is a really exciting time in politics.” Then, for the first time on record, he explicitly sets out the extent of his ambitions: “I mean, look, you’re probably going to chuckle, but – I mean, I want to be prime minister. Not out of some weird sort of vanity, but because there is no point in me being leader of my party unless I want to actually get in a position to change stuff. But I want to change stuff not on the basis of the old rules.”

Looking back at his time as leader, Clegg admits he had a “bumpy” first year, though he has grown into a job widely regarded as one of the hardest in British politics. Asked about low points, he says “you get into some cuts and scrapes along the way – probably some interviews which I probably would rather have not done.” He is referring to the infamous exchange in GQ magazine, in which Piers Morgan pressed him on how many women he had slept with. Clegg eventually told him: “No more than 30 . . . it’s a lot less than that.”

He says now: “It wasn’t the greatest time, and also, of course, I realised immediately that everyone could have a good snigger and giggle at my expense . . . So you learn those things and I’ve learned it the hard way!”

At a market in Durham, Clegg risks the wrath of voters who are furious at politicians over the expenses scandal. Charlotte Bell, behind the till in a sweet shop, sums up the feeling on the ground: “It’s fair to say everybody is pretty fed up with it. Everybody has to tighten in a recession, to scrimp and save, and now they’re taking our money.”

Nobody seems unaware of the scandal. Carol Whitfield, who runs a sausage stall, says she is “absolutely appalled. It’s thieving, it’s robbery, it’s embezzlement. If I’d done that, I’d end up in the county court.” Clegg himself, however, goes down well. And, perhaps surprisingly, people seem to know who he is. “That’s Nick Clegg. I recognise him,” says Barbara Hammond. “I hope you lot are keeping tabs on his expenses,” her husband William adds drolly.

Earnest but not humourless, Clegg answers questions with a directness and honesty unusual in a Westminster politician. And he evidently enjoys escaping London. Asked to sum up why he is in politics, he pauses.

“The really simple answer is: to do things differently,” he says. “I really believe that we can be a fairer, a greener, a better country, if we snapped out of the old way of doing things – red, blue, red, blue, blue, red – and that’s what I believe in and that’s why I’m in politics.”

Additional reporting by Rhiannon Hughes

To see the full transcript of the interview, click here