EADT Political Editor Graham Dines looks at the task ahead for Sir Menzies CampbellTHE contest which yesterday saw Sir Menzies Campbell declared the new leader of the Liberal Democrats was sparked by the greatest crisis in the party's 20 year history.

EADT Political Editor Graham Dines looks at the task ahead for Sir Menzies Campbell

THE contest which yesterday saw Sir Menzies Campbell declared the new leader of the Liberal Democrats was sparked by the greatest crisis in the party's 20 year history.

Charles Kennedy, the leader who had just taken the Lib Dems to the best election result for a centrist party for 80 years, was forced out by his colleagues who were tired for covering up his drinking.

As rank-and-file Lib Dems absorbed the news that the man they adored was an alcoholic, the contest got under way - only for one candidate, Mark Oaten, to become in embroiled in a gay sex scandal involving rent boys and for another, Simon Hughes, forced to apologise if he had misled anyone over his sexuality after first denying and then admitting he was gay.

Thus the first task facing Sir Menzies is to start the fight back after a leadership contest which has failed to claim the headlines for positive reasons.

The long leadership election has not exactly caught the headlines, although the Lib Dems did pull off a remarkable success last month when they won the Dunfermline and Fife West by-election in a part of Scotland which is traditional Labour territory.

This victory lifted the spirits of the Lib Dems as they weighed the options of the three leadership contestants, but the problem underlying the party's immediate future is the resurgence of the Conservatives under David Cameron, who could wreck the prospects of the Lib Dems at the next General Election, especially in the south and east of England.

The Tories have moved more to the centre of British politics, and have challenged former Tory voters who defected to the Lib Dems in the 1997, 2001 and 2005 elections to return home.

Tony Blair is also on the attack, portraying the Lib Dems as weak on social legislation as Labour strategists try to overcome the Lib Dem appeal in seats which now have a high minority ethnic vote, especially Muslims who object to the war in Iraq.

Former leader Lord Paddy Ashdown, who had endorsed Sir Menzies, admitted the party faced a hard time in the coming months and it would be an optimistic Lib Dem who does not believe the new leader will immediately need to start rebuilding the image of a party which had always prided itself on trust and openness.

This weekend's spring conference in Harrogate will offer Sir Menzies the perfect opportunity to plead for unity and fire up delegates to campaign in this year's crucial local government elections in London and the rest of England.

Sir Menzies will be given six months grace to shape party policy before the Lib Dems gather for their main conference in Brighton in September. The party cannot leave the seaside resort without a proper sense of direction.

Last year's conference in Blackpool was riven by warring factions, best summed up as social liberals and economic liberals. The former are left-leaning exponents of a local income tax, the introduction of a 50p top rate income tax for those who earn more than £100,000 a year, are opposed to the privatisation of Royal Mail, and want the Lib Dems to maintain their traditional support for civil liberties.

The economic liberals - also known as Orange Book liberals because leading members co-authored a book on future fiscal polices - lean to the right, support private enterprise and the market economy, realise the damage their taxation policies are having on voters in the south and east, and who support the freeing up of postal services.

The criticism of Charles Kennedy after last year's conference is that he was not leading his party, merely presiding over two wings and hoping one faction would emerge so that he did not have to dirty his hands by choosing one over the other.

During the leadership campaign, Simon Hughes has been identified as the left wing champion while Chris Huhne won the support of many of the Orange Bookers. Sir Menzies Campbell attempted to avoid either label.

Those who see the Lib Dems as a repository for disgruntled protest votes may not think it matters which direction the party takes. But it does.

Many observers are predicting a hung parliament, which means the Lib Dems might be called by one of the other parties to form a coalition. The new Lib Dem leader may be called on to prop up another party - and if he gets it wrong, electoral annihilation could follow at the following election.