DEPUTY Prime Minister Nick Clegg has set the stage for a bitter general election battle next year, with a warning that "a lot of mud will be thrown" in the run-up to polling day in May.

The Liberal Democrat leader used his New Year message to urge voters to give his party the chance of a second term in government, rejecting the politics of "grievance, fear and blame" offered by their rivals.

After a difficult period for the country, he said that 2015 should be a "year for optimism" but that the two main parties presented the electorate with a "pretty grim choice".

While the Conservatives were abandoning the centre ground of the coalition and "swerving off to the right" with plans for "ideological" cuts to public services, he said Labour remained "in denial" over its role in the economic crash.

With the opinion polls suggesting the Lib Dems will pay a heavy price at the ballot box for joining the Conservatives in coalition, Mr Clegg insisted the current economic recovery would never have happened if they had not "stepped up to the plate" to form a stable administration after the last election.

In a now familiar refrain, he argued that only a continued Lib Dem presence in government after the election in May could guarantee both a stronger economy and a fairer society.

"I will always stand up for the Liberal British values of openness, tolerance and compassion against those who peddle the politics of grievance, fear and blame," he said.

"This year, a lot of mud will be thrown. A lot of over the top claims will be made, a lot of accusations will be hurled around the place. Ignore them.

"Make 2015 a year for hope, not fear. For optimism, not division. For everybody."

Mr Clegg was scathing about Ed Miliband, accusing the Labour leader of trying to pretend he could "wave a magic wand and everything will be better" while failing to admit the economic pain of the last few years was the direct result of the collapse his party presided over.

At the same time, he emphasised how he had had to "fight inside government every day" to ensure that the coalition with the Tories remained on the centre ground.

"Now that there's an election looming, far from sticking to the plan we've pursued in government, the Conservatives are swerving off to the right and advocating ideological cuts to our public services," he said.

"The Conservatives in power, on their own, will look after their own kind. They won't spread opportunity for everybody."