In the honeymoon days, when the atmosphere within the coalition was so light and breezy that David Cameron and Nick Clegg could be amused by the differences between their parties, they shared a private joke. The Lib Dems' attachment to elaborate consultation and exhaustive internal democracy was like "a kibbutz". In contrast, the Tories were "Napoleonic" in their apparent willingness to follow unquestioningly orders handed down from above.

As it has turned out, they have both been proved wrong. So has everyone else who started off with the assumption that there would be a big strain on the coalition from the contrast between obedient, realistic Tories who understood that power involves compromises and difficult, naive Lib Dems who would insist on putting their precious principles ahead of the deals necessary to make coalition government work. Sure, there has been that contrast – but, by and large, it is the Lib Dems who have been the grownups of the coalition and the Tories who have been the juveniles.

The Lib Dems have understood the fundamental premise of coalition: that a marriage between two parties can be sustained only if both partners are prepared to sacrifice their own preferences for the greater cause. Mr Clegg's party has been astonishingly disciplined over the past two years. To a fault, they have often put aside their own desires and interests for the sake of coalition unity. They have held their noses and voted through welfare cuts, immigration caps, tuition fees and a health plan which was not even in the coalition agreement. With one or two exceptions, their ministers have been stalwart defenders of the coalition and their backbenchers have refrained from badmouthing it.

For this, they have paid a punishing price. At local elections, Lib Dem councillors have been slaughtered. On their current opinion poll rating, they have lost more than half of the support they received at the last general election. They have virtually no friends in the press. Their leader has been flayed to within an inch of his political life.

Coalition has generally been much easier for the Conservatives. As the bigger party, they have been asked to make far fewer compromises. It is the snarl of the rancorous tendency on the Tory backbenches that David Cameron has allowed the yellow tail to wag the blue dog, but there is scant evidence to support their cries of betrayal.

Sayeeda Warsi, the Tory party co-chairman, can cheerfully, and pretty much accurately, boast that the government is implementing 80% of the Conservative manifesto. Where the coalition has pursued Lib Dem ideas, such as tax cuts directed at those on low incomes or the pupil premium for schools in deprived areas, Tories have not had to grit their teeth. They have taken up these policies because they liked them. Yet a significant section of the Conservative party was never happy with coalition from the off and these rejectionists have been growing in noise and numbers as time has gone on. Unlike the Lib Dems, they refuse to accept the fundamental basis of coalition: that of give and take on both sides.

This contrast came to a vivid head last week when the government had to beat its humiliating retreat over Lords reform – legislation shaped by a Tory minister and approved by the whole cabinet – because almost 100 Tory MPs defied their whips. This is a debacle with several consequences, none of them good for the health of the coalition. Tory MPs now think they know that when they see the whites of the prime minister's eyes, they can make him blink. The Lib Dems now know that when David Cameron promises he can deliver the Conservative party, his word cannot be relied on.

"Cameron didn't work anything like hard enough," says one senior Lib Dem. "He's had two years to think about how he was going to do this and failed." Mr Clegg felt obliged to accede to the prime minister's plea to be given more time to work on the Tory rebels, but there is little confidence among senior Lib Dems that Mr Cameron will be able win over enough of the dissenters to secure a timetable for the legislation when parliament returns in the autumn.

Whatever you may think of these proposals for the Lords, the Lib Dems burn with an entirely understandable resentment that they have repeatedly done their duty by the coalition by swallowing a lot of things they don't like, but a blocking minority of Conservative MPs simply will not reciprocate when it comes to something that Lib Dems care about. From my conversations with very senior Lib Dems I have absolutely no doubt of this: if Lords reform does not progress in September, the Lib Dems will respond by killing the redrawing of constituency boundaries which are estimated to be worth an extra dozen to 20 seats to the Tories at the next general election. Moreover, they will veto the boundary changes as an explicit act of payback for Tory sabotage of Lords reform. It won't be a case of Nick Clegg quietly licensing his backbenchers and peers to work with Labour to vote down the boundary changes. All Lib Dems, ministers included, will vote against.

More than once, and in terms no one could misunderstand, Mr Clegg has warned Mr Cameron that the Lib Dems cannot go into the next election having delivered all the constitutional changes which suit the Tories and not secure a single reform hoped for by the Lib Dems. As one Lib Dem minister puts it: "What will it say about the whole idea of coalition government if the junior partner always gets the shit end of the bargain?"

The Conservatives attach enormous importance to the small haul of extra seats they expect to gain from these boundary changes – a sign of their lack of confidence that they can win the next election. If the Lib Dems vote down the boundary changes, some Conservatives predict that the anger among Tories will be so intense that it will be the death knell of this government. So it is possible that the coalition will collapse in poisonous acrimony and Ed Miliband will be prime minister by Christmas.

On the spectrum of probabilities, this remains an unlikely scenario. Mr Cameron and Mr Clegg have a mutual interest in keeping the show on the road if only for fear of what would happen to their parties at an early election triggered by a squabble over the constitution which would look arcane and self-indulgent to the vast majority of the public. Both men would have a hard time explaining to voters why Lords reform and bagging a few extra seats in the Commons for the Tories were more important to them than sticking to their original promise to work together for a full parliament to fix the economy.

So the coalition will probably endure. The question is in what sort of state. Tomorrow Mr Cameron and Mr Clegg will try to reinvest their partnership with some dignity by making one of their joint appearances, on this occasion to launch their latest ideas for trying to stimulate the economy through housing and other infrastructure projects.

They will never recapture the early romance of coalition when their claimed willingness to put aside party differences to tackle a national economic emergency captivated many voters and deeply alarmed senior people in the Labour party. The sweet scent of the rose garden has evaporated for good. The best they can probably now aim for is to demonstrate that there is still some residual shared purpose to this endeavour.

For Mr Clegg and his party, the long-term point of being in coalition was to prove to Britain that it could be a stable, effective and attractive form of government. A descent into a permanent condition of seething acrimony, punctuated by furious shouting matches and parliamentary defeats, will discredit the very idea of coalition government. Voters will not be minded to repeat the experience, which won't be good for Lib Dem hopes of being in office again.

Quite a lot of the Tory party would be secretly – and not so secretly – delighted if this coalition gave a bad name to the whole notion of coalitions. David Cameron has a decision to make: is he one of them? It was his initiative which led to the formation of the coalition. When he made his bold offer to the Lib Dems on the morning after the last election, it was the most creative gambit of his political career, the best response to the circumstances and highly popular with much of the electorate. Failure to make it work will not say good things about his judgment or abilities.

So the prime minister has some hard thinking to do over the summer. Is he ready to take ownership of the coalition? Can he confront those in his party who want to wreck the government with the determination now necessary to save it? Will he tell the hard truths to the Conservative party about the necessary compromises of sharing power?

If he is not able or willing to do that, then no one else can rescue the coalition.