Lib Dems rule out Scottish deal, potentially shunning Labour

LONDON (Reuters) - The leader of the Lib Dems ruled out joining a government that relied on support from Scotland's nationalists, raising a potential obstacle to a coalition deal with the Labour Party after a national election on May 7. Nick Clegg, deputy prime minister who may again be kingmaker after a knife-edge election, also said he would prefer to line up with the party that wins most parliamentary seats, another potential hindrance to a deal with Labour. The centrist Lib Dems have been the junior partner in a coalition with the Conservatives since 2010, disappointing many of their voters by working with a right-leaning party. They are forecast to lose around half of their seats, meaning they could struggle to form a coalition government with Labour. In an interview with the Financial Times on Saturday, Clegg said he could not work with the Scottish National Party (SNP), which seeks independence for Scotland, or the anti-EU UK Independence Party (UKIP). "I totally rule out any arrangements with the SNP — in the same way I rule out any arrangements with UKIP — because there is no meeting point for me with one party that basically wants to pull our country to bits and another party that wants us to pull out of the EU," Clegg said. "I would never recommend to the Liberal Democrats that we help establish a government which is basically on a life support system, where Alex Salmond could pull the plug any time he wants," he said of the former SNP leader. The closest election in a generation has baffled Britain's political classes who are poring over opinion polls and Westminster seat predictions to see who might rule the $2.8 trillion economy after the vote. Opinion polls indicate neither the Conservatives of Prime Minister David Cameron nor Ed Miliband's Labour will win an overall majority in the 650-seat parliament. Surveys show millions of voters flocking instead to once marginal parties, including in Scotland where the SNP looks set to make major gains. Labour, which looks to be all but wiped out in its once stronghold of Scotland, has ruled out a formal coalition with the Scottish nationalists but left the door open to an informal deal. The SNP has said it would never work with the Conservatives. Clegg said he would open talks on May 8 with the party with the biggest mandate. Most analysts think Cameron's Conservatives could win the most seats but see Labour's Miliband as having more options to form a coalition. "You cannot provide stability, you can't take difficult decisions, if people are constantly questioning the birthright of a government," he said. (Reporting by Kate Holton; editing by Clelia Oziel)