Acting Liberal Democrat leader Vince Cable has dismissed David Cameron's offer to forge a "progressive alliance" against Labour.

The Conservative leader had called on the Lib Dems and the Green Party to join forces in promoting a "decentralisation agenda".

Writing on his website, Cameron said: "I've always believed that political parties, even though they may have serious disagreements over many aspects of policy, should work together in areas where they agree.

"So I hope than in 2008, the Liberal Democrats and the Green Party will join us in putting pressure on the government to decentralise power, and that together we can create a new progressive alliance to decentralise British politics."

Cameron said he wanted the Tories to be "the leading voice in British politics" in terms of providing people with "more opportunity and power over their lives".

"This modern decentralisation agenda is key to achieving social and environmental progress in the 21st century," he wrote.

Claiming that Tory-Lib Dem alliances had helped pass the Sustainable Communities Bill and introduce a Climate Change Bill, he said: "One particularly exciting aspect of this decentralisation agenda is that it is shared by other parties."

'Cloud cuckoo land'

However Cable rejected the offer, saying that Cameron was living in "cloud cuckoo land".

"The Liberal Democrats will continue to work with other parties on issues where we have common ground and can work together in the national interest," he said.

"However, this is not a serious proposal and David Cameron clearly lives in cloud cuckoo land."

Pointing out that the Tories back airport expansion and want cuts in public services, he said: "The Liberal Democrats are the only party who consistently offer a clear and progressive agenda for a fairer, greener and liberal Britain."

The move, which comes days before the Lib Dems unveil their new leader, was also dismissed by leadership hopeful Chris Huhne.

"David Cameron's claims to be pushing the green agenda are just as hollow as Gordon Brown's," said the environment spokesman.

"In the summer of 2006, we had to break off our attempts to come up with joint policies because the Conservatives were not prepared to talk seriously about green taxes."

Former Lib Dem leader Charles Kennedy also said he did not "see a great consensus between the leaders of the Tories and Liberal Democrats" on issues such as Europe.

"We are in favour of the new EU treaty - they are against it," he told the BBC's AM programme.