The Liberal Democrats must never turn their back on a "free market of ideas", the party's elder-stateswoman has warned.

Addressing the party faithful, Baroness Williams said the Lib Dems must maintain debate on radical policy proposals.

Following a row over the Orange Book, which detailed a raft of new policy proposals, Williams mounted a stout defence of new thinking.

"The Orange Book has created a great furore in the press. Let me say right away, as strongly as I can, that a radical Liberal Democrat party cannot survive without the free market of ideas," she told the conference.

"I therefore welcome radical proposals, radical suggestions, radical ideas. I think the authors of the Orange Book should be actually praised for bringing highly controversial ideas before our party.

"Surely we are grown up enough to debate them in a constructive and friendly way."

Williams also defended her party's policy of raising income tax for top earners.

Under Labour she said the "rich are becoming much richer, the poor are standing still".

"Against this background, it is right to ask the best-off in our country to contribute a little more in tax, so that the less well-off people can send their children to university, and ensure proper care for their older relatives," she said.