Those LibDems with long enough memories will shudder at the memory of the Liberal/SDP Alliance and the subsequent trouble with 'electoral pacts'. Democracy was not served well; loyal activists from both sides felt let down by the agreements from the opposite side.
For the Tories and LibDems to agree standing down in tough marginals would be a gift to Labour. Suddenly Rochdale would never seem like a LibDem target again, ditto both Oldham seats. What would happen in Southwark, where Labour have been denied 'one of their own' for decades? How would Wales react - Cardiff has a LibDem MP and both sides of Newport almost did. Would Conservative supporters in, say, Westmorland and Lonsdale [a LibDem stronghold, ex-Tory] really want to vote for Tim Farron? Would LibDems in Harrogate vote Conservative?
One consequence of a 'pact' which has been barely mentioned is the sudden rise of UKIP. Despite being trounced from every angle, latest figures from the Electoral Commission point to the UK Independence Party being the only mainstream group to enjoy an increase in membership. Both Tory and Labour voters would merrily troop into the UKIP fold, even with AV, if a dodgy deal is agreed betwixt Coalition partners.
LibDem voters at the last election knew that the introduction of STV (our ultimate goal) would have meant a future of coalition governments and compromises between parties. Lord Mandleston in the brilliant "5 Days That Changed Britain" hinted at his realisation that majority governments of the size enjoyed by Thatcher and Blair are things of the past. Britain doesn't do mammoth mandates anymore. This Coalition could be the start of something big, even if AV is not introduced.
However, I agree with Nick Clegg's words from before the election; the LibDems are not to become an annexe of the Conservative Party. Any electoral pact would start laying down the foundations. Clegg should publicly dismiss the idea. There are many LibDems who have tasted such agreements before - we tend not to return to a tree if the fruit tastes sour (and from oak trees grow acorns, and they are awful....)