London: Nick Clegg’s leadership is ‘in trouble’, his deputy admitted yesterday.

Simon Hughes spoke out as the Deputy Prime Minister prepared to distance himself from David Cameron with a call to scrap benefits for better off pensioners.

Hughes acknowledged that there was growing ‘chatter’ within the party about Clegg’s leadership following months of polls suggesting the Lib Dems will be wiped out at the next election.

Clegg will mark his fifth anniversary as Lib Dem leader with a major speech today in which he seeks to defend his party’s record as a moderating influence, boasting that he headed off £6 billion (Dh35 billion) of ‘extreme’ benefit cuts demanded by the Tories.

Three opinion polls yesterday recorded the Lib Dems languishing in fourth place on less than 10 per cent of the vote. Hughes, deputy leader of the party, told LBC Radio that the dire ratings were an inevitable consequence of the decision to go into government with the Conservatives to deal with the massive budget deficit left behind by Labour.

Some Lib Dems have warned privately that Clegg’s personal unpopularity with the voters is dragging the party down, and there is mounting speculation that he could be replaced by Business Secretary Vince Cable before the next election.

Asked whether Clegg’s position as party leader was secure, Hughes said: “There’s a little bit of chatter, but there’s bound to be given the situation we find ourselves in the opinion polls.

“Nick led us into government for the first time since the Second World War, and whoever had been leader of the Liberal Democrats would have been in trouble and criticised for the decision we made.” A Lib Dem source last night insisted Clegg’s position was secure. “He will lead the party into the next election and beyond,” the source said.

His comments came as Clegg prepared to deliver a major speech on benefits in which he will call for the welfare state to be transformed into an “enabling state”.

Setting out his own vision for the future of the welfare system he will call for a review of whether pensioner benefits, such as the winter fuel allowance and free bus passes and TV licences, should continue to be paid to the better off. “Money should not be paid to those who do not need it,” he will say.

He will also call for new measures to “incentivise work by supporting childcare more effectively”.

His comments on pensioner benefits are a direct challenge to the Prime Minister who made a high-profile pledge during the last election campaign that they would not be touched.

The Deputy Prime Minister will also boast that the Lib Dems headed off Tory demands for extra welfare cuts totalling more than £6 billion in George Osborne’s autumn statement earlier this month.

Clegg claims that he vetoed a proposal from the Prime Minister to end housing benefit for the under-25s, together with an idea from Work and Pensions Secretary Iain Duncan Smith to limit child benefit payments to the first two children. “That is the job of the Liberal Democrats — to anchor reform in the sensible centre ground,” he will say.

Clegg reveals that the only restriction on welfare he was prepared to accept was a one per cent cap in the annual rise on benefits.

The result was that a £10 billion package of benefit cuts was reduced to £3.8 billion, leaving a hole that had to be filled by tax rises and cuts to other services. Clegg labels the two Tory proposals “extreme”, saying they would have “penalised” young people and larger families.