We may, just may, be on the brink of a revolution which blows apart the way our politics has been done for decades. It will be a very British sort of revolution: bloodless, a bit ironic, decades in the making, very slow to get going. At its spearhead will be a most unlikely revolutionary, a quite conventional man who dresses in a grey suit and a canary tie.

Nicholas William Peter Clegg is a banker's son who went to public school – "elite Westminster School" as the tabloids like to have it. Contemporaries remember the young Nick as a rather well-behaved and swottish teenager. He was an EU trade negotiator and an adviser to a Tory commissioner in Brussels who assumed his young aide would become a Conservative MP. He was also employed for a while by a lobbying company – not a line on the Clegg CV which Lib Dems would like you to dwell on. His charming wife, Miriam, a lawyer, is the daughter of a Spanish senator.

His most incendiary youthful act was to set fire to a German professor's prized collection of rare cacti – and it now appears that tale of juvenile misdemeanour may have been embellished in the telling. He claimed for a new kitchen on his expenses. And for a cake pan, a detail which David Cameron thought so killer that the Tory even jibed about it in the second leaders' debate.

All of that has now been brought to the voters' attention along with the buckets of muck that have been chucked at him by a desperate right-wing press angry that Nick Clegg has become popular without their permission. None of it appears to have done any harm to the accidental revolutionary. As one senior Tory puts it, not without envy, Nick Clegg has put himself at the head of a revolt against the old politics by successfully turning into "Jimmy Stewart in Mr Smith Goes to Washington".

Behind the strained rictuses of Tory and Labour politicians, both parties are numb with shock that the rise of the Lib Dems has shattered all their assumptions, not just about this campaign but about how British politics is supposed to work. Both are frantically trying to contain their internal recriminations in the hope that the other side will be the first to start falling apart in public.

The best that now looks possible for the Tories is to form a minority government with a vote share so poor that it will not provide a proper mandate. The very, very best would be a tiny Tory majority. Much darker scenarios haunt senior Conservatives. It is quite plausible that they could find themselves in opposition again and, worse, facing a Labour-Lib coalition that introduces proportional representation. David Cameron continues to inveigh against a hung parliament, but it is telling that he did not rule out forming a coalition with the Lib Dems – a possibility he would have laughed at a month ago – when he was interviewed for the Observer by myself and political editor Toby Helm yesterday morning. Nor, when we asked him several times about electoral reform, did the Tory leader say "never" to agreeing to a fairer voting system if that were the price of admission to Number 10.

Many Conservatives fear that a Lab-Lib deal on PR could exclude them from power forever. It would certainly mean that it is almost impossible to envisage how they could ever again form a government on their own.

Labour, too, contemplates the highly serious possibility that Gordon Brown could be the last Labour prime minister ever to enjoy the absolute power of a one-party parliamentary majority. The level of threat to Labour is potentially even more existential than that. More opinion polls, published this morning, confirm that Labour is trailing in third place. Labour people were initially so delighted to see the damage done to the Tories by the Lib-Dem surge that they appeared blind to the threat to themselves, almost as if they didn't mind losing so long as the Conservatives were losing too.

Even Michael Foot managed to come second in Labour's nadir year of 1983. Some members of the cabinet are no longer in denial about the possibility that their zombie-like campaign is trudging towards a cataclysmic outcome: third place in the popular vote, a result which would have what one minister calls "incalculably bad" consequences for Labour. That would be an outcome truly deserving of the appellation "historic". It would reverse the supplanting of the Liberals by Labour in the early 20th century as the principal progressive party.

When the Lib Dems first began to break through, the other two scoffed that Cleggphoria was a swoon, a holiday romance, a moment of madness by the voters that would soon pass when they came back to their senses and fell back into the arms of the big, old boys. When the Lib Dem surge persisted, they expected to turn back the tide at the second debate. Both Gordon Brown and David Cameron upped their tactical game as well as the aggression level towards both the Lib Dem and each other. But the strategic imperative for both of them was to find a way to wrench the wheels off the Cleggwagon and in that they failed.

The explosive transformation of this election is likened to a volcanic eruption. The point about volcanoes is that they don't blow by accident. An eruption is the product of pressures that have been swelling below the surface for years, decades, even centuries. This eruption against the Labour-Tory duopoly has been building over 65 years. At the general election of 1945, only an eccentric minority of voters did not identify with either red or blue. Under 5% of voters supported a different party.

At the last election, nearly a third of voters backed parties that were neither Labour nor Tory. Labour was returned to power on the most grudging basis possible with the support of barely one in five of the total electorate. Britain ceased to be a two-party country a long time ago. It is only the straitjacket imposed by first past the post, an arcane and increasingly capricious voting system, that has masked this trend and stifled the emergence of a new way of doing politics more suited to the desires of the country. The parliamentary expenses scandal and the economic bust brought to a head a much longer trend of alienation.

The shared mistake of the increasingly unpopular duopolists was to carry on assuming that power would continue to alternate between the two of them. Labour has had a death-bed conversion to a minimalist version of electoral reform when it could have and should have embraced change from a position of strength in its first term. The Tories went into this election believing that they could secure unfettered power on a minority of the vote simply by repeating that Gordon Brown is rubbish. They believed that fairly minimal modernisation of themselves combined with simplistic slogans about change would restore them to their previous pomp. They took it for granted that David Cameron just had to turn up at the TV debates to win them. These encounters between the leaders have crystallised something that was already apparent before the election had begun: the Tories never clinched it with the country. David Cameron sounds persuasive to those who are already basically persuaded that they are going to vote Conservative. He struggles to net the unconverted. In fact, since the campaign began, he has lost more floating voters than he has gained.

The Tories are paying for coming to this election with a sense of entitlement to power. Labour, too, was arrogantly complacent, odd though that may seem when we are talking about a party with a very unpopular leader who has presided over the worst recession since 1945. Most of Labour's senior ranks expected to lose, but they still assumed that they were entitled to ownership of progressive Britain and could demand its votes for Labour if only on the uninspiring grounds that this would limit the size of a Tory victory. Gordon Brown has found it hard to conceal his bewilderment that he is having to debate with a Lib Dem, never mind that the Lib Dem should be pushing him into third place.

The Conservatives, for all the superficial modernity of their marketing, are staging an essentially traditional form of gridded campaign and finding, just like their friends in the Tory press, that the old playbooks no longer work. The opinion polls gyrate from day to day, but one message from them is clear and consistent. At some collective, unconscious level, the nation has decided that it does not trust either Labour or the Tories to clean up politics if one of them is allowed to govern alone. Nor does it trust either of them to take sole responsibility for the economy, taxation and public services.

I'd be a liar if I claimed to be able to forecast the outcome of this sensationally uncertain election. That very unpredictability is perhaps the point: the country thirsts for a much more fundamental change than simply another transfer of single party despotism from blue to red or red to blue.

• More election comment from Cif at the polls