Re-sult! Balls’ charm offensive defrosts Clegg

Ed Balls has made a friend – or, at least, turned an implacable enemy into a potential ally.

The new year saw the shadow chancellor give an interview to the New Statesman in which he made clear he wanted to palsy it up with Clegg. They had even had a friendly conversation in the Commons, Balls was able to reveal.

With the general election – and another possible hung parliament – now due next year, both Labour and the Liberal Democrats are thinking more seriously about the idea of working with each other.

For much of this parliament Labour were firmly expecting to be able to get revenge for Clegg's 2010 'anyone but Brown' demand. Clegg would never survive the devastating cull of Lib Dem seats which everyone expected would arrive in 2015.

That still seems very plausible. But the general sense of expectations in Westminster has shifted – and in the deputy prime minister's favour.

Rather than preparing to collapse like pack of cards, the Lib Dems' electoral prospects have improved. Everyone was impressed by their strong morale in Glasgow last autumn and the general view now is they may be able to defend more of their seats than was previously thought.

Even more shocking is the very real possibility that Clegg may survive 2015. His position in the party has strengthened since the terrible reception to Vince Cable's troublemaking last year. Now Clegg is presenting himself as a plausible deputy PM in a Lib-Lab government. And Labour are responding in kind.

They've realised that they may have to work with this man, after all. Which is why Balls realised he had a problem before Christmas when, in a Christmas edition of his LBC show Call Clegg, the deputy prime minister declared: "I always try to keep a good sense of humour, and if I have an argument with someone to keep the argument about what the argument is about and not allow it too often to become sort of personal.

"I make one exception, for a man named Ed Balls. But other than that I try not to make it about insults and stuff."

Clegg's passive immobility in prime minister's questions is notorious. Instead of being nothing but thick skin, his comments – even in jest – revealed a level of antipathy which had to be resisted.

This explained Balls' overtures in his New Statesman interview last week, when he declared: "I can disagree with Nick Clegg on some of the things he did but I've no reason to doubt his integrity. We've never, I don't think, ever had a cross word."

Clegg, obliged to respond because of the media attention brought about by the shadow chancellor's comments, was more generous, insisting he tried to be nice to everyone – including Balls.

He told BBC1's The Andrew Marr Show: "One thing I try and do, however strongly I might try and disagree with people's points of view, I generally try and personalise it and I'm not going to do it with Ed Balls or with anybody else."

What this great kiss-and-make-up story reveals is that Westminster is slowly beginning to realise the Lib Dems will matter after 2015. "It is the choice of the British people at the next general election," Clegg insisted today about who gets into power. True – unless no party, as is very possible, gets an overall majority. Then there's a strong chance the choice becomes his and his alone.