Since no Liberal has been near to prime ministerial office in living memory, we have no record on which to judge how they would run the country. The only fair means by which we can tell what a Lib Dem government would be like is to look at how they behave when they do get to exercise power. That, of course, means looking at their record in local government. But there is a still better guide to their behaviour: there is one area where they get to exercise untrammelled power, free from any opposition constraints, and behave exactly as they like. We can look at how they run their own party.

The message from that is clear. They are the most glaringly opportunist bunch of hypocrites in politics.

They take money from the most dubious characters. Some of them even use their party position for personal ends. And then, when the fact that they have taken millions from a cheque bouncer is plastered all over the papers, they not only refuse to comment, they hang on to them without the tiniest show of embarrassment.

Let’s rewind the tape. Yesterday The Times revealed that the businessman Michael Brown, who has so far given the Lib Dems £2.4 million — fully two thirds of its income in the first quarter of 2005 — has been arrested three times for fraud, has been accused of bouncing a dozen cheques and is regarded as an absconder in Florida, having skipped probation. He is a wanted man in that state.

Let’s be charitable. Let’s accept that the Lib Dems had absolutely no idea that Mr Brown was anything other than an upright citizen when he offered to give them £2.4 million. (The sheer naivety of a party that is apparently happy to let almost anyone walk in off the street and bankroll its election campaign with hardly a question asked should be enough to disqualify them from being taken seriously.)

Whatever they might or might not have known or been expected to have known about their largest-ever donor, they certainly know about him now. They know that the person behind their biggest ever donation is about as dodgy as you get.

So how have they responded? With total silence. Without the slightest expression of regret. Without any sense, let alone admission, of having done anything wrong. And — more importantly than anything else — by hanging on to the £2.4 million for dear life.

If the Lib Dems were anything other than a bunch of holier than thou, self-righteous hypocrites they would, as soon as the bizarre background of their donor had been revealed, have expressed immediate regret and pledged to return the money promptly.

As for their former treasurer Reg Clark: he took the opportunity presented by the appearance of Mr Brown on the scene to solicit up to £700,000 from the party donor for his own business. That’s a smiley, clean Lib Dem for you.

It gets worse. The first part of Mr Brown’s donation to the party came not, as the law requires, from a British company and a British resident, but from a company with no UK office, via a Swiss bank account, from a man who was not on the British electoral roll.

How was I to know there was anything dodgy, officer?

Not that anyone should be surprised by the Lib Dems’ hypocrisy and shameful behaviour. On screen, their national spokesmen and women smile charmingly and portray themselves as decent people who may be a bit wet but are unlike the other politicians.

Unlike them, indeed; they are far tricksier. A few years ago I worked in Tower Hamlets, where the Lib Dems were the opposition to a dreadful, moribund Labour council. The area has a large Bengali and Somali population. Instead of fighting on their merits, and the real failures of the Labour council, the Lib Dems’ tactic was to campaign for a “sons and daughters” housing policy, with priority on the list to the children of “local” residents. It was thinly veiled racism. But that only made it all the more attractive, as they were able to rail against unjust legislation that discriminated against “local people” in favour of “visitors”. At least you knew where you stood with the BNP.

There are, of course, some good and decent Lib Dems. The younger, authentic liberals who believe in markets and competition could turn the party into a genuine force for good. But the existing leadership lets them down.

Let’s accept the most generous interpretation of the leadership’s response to the funding crisis — weakness and lack of attention to detail.

In the first year of his leadership, Mr Kennedy’s “all things to all people” stance might perhaps have had some point. But now it destroys any serious claim that his party of 62 MPs may have on power. Either Mr Kennedy believes in the expansion of public services or he does not. Either he believes in higher taxation or he does not. Either he believes in transparency in politics or — as seems clear — he does not.

Even before this latest crisis, the few Lib Dems who are not frivolous have been muttering that, so long as Mr Kennedy remains leader, the party is going nowhere. Now that we have seen his response to the revelations, it is surely beyond dispute that he is a liability who must be removed forthwith.

Already, some people have responded to yesterday’s revelations by calling for state funding of parties. That misses the point. It is because we can see how they run their own party and how they respond to such crises, that we can see that they are unfit for office. By their behaviour let them be judged.

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