Vince Cable: We've halted 'offensive' Tory policies that caused 'revulsion' under Margaret Thatcher

Coalition tensions deepened today after Business Secretary Vince Cable claimed the Liberal Democrats have stopped the Conservatives from being "offensive" and that the party caused "revulsion" under Margaret Thatcher.

In a separate attack, fellow Lib-Dem Cabinet minister Chris Huhne said his Tory partners were guilty of "downright lies" and "gutter politics" in the AV referendum battle.

David Cameron refused to discipline the pair, saying he had to be "a bit relaxed" as leader of a Coalition. But he was coming under fire for remarks made yesterday which the Lib-Dems took to be an attack on Nick Clegg's sincerity.

Mr Cable's remarks were seen as the most inflammatory. In Scotland last night he spoke of having been part of an "anti-Tory tradition" when he was a Scottish Labour activist. "I do understand the revulsion that people have for some of the policies of the 1980s," he said. "What we have done in this Government is stopped a Conservative government doing many of those things that people in Scotland found offensive."

Energy Secretary Chris Huhne accused the Conservatives of smearing the Yes campaign in the AV referendum taking place on May 5. "I can never remember a campaign that has stooped as low as the No campaign in dredging up stuff that they know is downright lies." he told Newsnight. "I think this is the politics of the gutter."

But this morning the Prime Minister appeared to give the pair a licence to continue speaking out. He claimed it was a strength to allow heavyweight figures to speak their minds. "Coalitions have their tensions and difficulties and noise off and the rest of it, and you have to be a bit relaxed about that," he told BBC radio.