The Liberal Democrats have steadily increased their vote in recent general elections and opinion polls suggest they will take an even higher share on May 5. They stand to win over Labour voters disenchanted with Tony Blair's leadership and Conservative supporters unconvinced by Michael Howard's hard-faced Toryism. Given the similarities between the main parties, there was an opportunity for Charles Kennedy to present a real alternative - an opportunity he has sadly squandered.

On some issues, the LibDems can claim a good record of providing backbone in opposition to the government. In opposing British involvement in the Iraq war, Mr Kennedy was mercilessly harried by the Conservatives who had supported it. On human rights, the LibDems have consistently defended long-established liberties against the government's illiberal instincts.

But on social policy, the LibDems offer a left-wing alternative to Labour, promising tax rises to fund even more public spending. Income tax would be raised to 50 per cent on income over £100,000 a year, and a local income tax would be introduced. This would pay for scrapping student tuition fees, introducing free personal care for the elderly and abolishing council tax.

This is probably smart tactics, since it has appeal on both sides of the political divide. Labour voters who find Mr Blair too timid on redistribution will be attracted by a bit of red-blooded tax and spend. Tory voters benefit most from extending the middle class welfare state through free university education and care for the elderly.

But it means that the LibDems are not offering anything distinctive - their extra spending adds up to less than £5bn a year. Far from a real alternative, Mr Kennedy is promising just a little more than the other two parties, both of which also pledge higher public spending.

This is a missed opportunity. There is a gap in British politics for a credible party advocating a smaller state and lower taxation. Some prominent LibDem thinkers proposed such a platform last year in The Orange Book, reminding readers of the Liberals' traditions on economic and social freedom. Unfortunately, they failed to persuade members whose instincts still combine liberal attitudes to civil rights with a predilection for the nanny state.

The support for the LibDems in opinion polls suggests they could do better on May 5 than in any national election since 1983. Then, more than a quarter of the votes went to the alliance between the Liberals and Social Democratic party - almost dislodging Labour from second place.

The danger for the country is not an improbable LibDem victory, however, but a result that leaves Mr Kennedy holding the balance of power. The experience of devolved government in Scotland shows it will be higher public spending that the party demands for its support, not the more market-oriented, less intrusive government that is liberalism's proud heritage.