DAVID Cameron and Nick Clegg insisted today that their coalition will continue, despite the humiliation handed out to Liberal Democrats in the elections and the referendum on voting reform.

Voters decisively rejected Lib Dem-backed proposals to change the way MPs are elected while the party lost around 700 councillors in England local council elections.

The Deputy Prime Minister admitted the results were "a bitter blow" for Lib Dems, but insisted his party would "pick ourselves up, dust ourselves off and move on".

Grassroots calls for Mr Clegg to be removed as leader were quickly slapped down by senior Lib Dem figures at Westminster, including his deputy Simon Hughes, who said he was "personally and politically as strong as when he joined the Government".

Despite some calls from the Tory backbenches for the coalition to be brought to an early end, Mr Cameron made clear he intends it to run its full five-year term.

The Prime Minister accepted the referendum campaign had been "difficult" for the Government, but he added: "The coalition agreement set out that we were going to ask the British people a very straightforward question and they have given the most clear and resounding answer.

"I believe that what the British people want us to do now is to provide a good, strong, decisive Government in the long-term national interest of this country, Conservatives and Liberal Democrats working together.

"That is what we have been for this last year and that is what we are going to be for the rest of this Parliament."

Responding to the AV vote, Mr Clegg said: "This is a bitter blow for all those people - like me - who believe in the need for political reform.

"But the answer is clear and the wider job of the Government and the Liberal Democrats in Government will continue - to repair the economy, to restore a sense of prosperity and jobs and optimism to the country. That's the job that we have started and we will see it through.

"Clearly this has been a really disappointing day and we have had a lot of very disappointing results overnight, but we are going to pick ourselves up, dust ourselves off and move on."

After all the 440 referendum results had been declared, 13m people (67.9 per cent) had voted to keep the first-past-the-post system to elect MPs, against 6.1m (32.1 per cent) backing the alternative vote.

With results available from 279 English councils, Labour had gained 839 seats and 26 councils, while Conservatives had increased their tally of councillors by 94 and the Lib Dems had lost 752.