So it looks like Nick Clegg has decided to go for option 3 as I highlighted in this post back in November. He has ruled out a formal coalition with either of the other main parties. Instead he would look to support a Queen's Speech that included the following:
1) Investing extra funds in education through a pupil premium for disadvantaged children.2) Tax reform, taking 4 million out of tax and raising taxes on the rich by requiring capital gains and income to be taxed at the same rate.3) Rebalancing of the economy to put less emphasis on centralised banking and more on a new greener economy.4) Political reforms, including changes to the voting system and a democratically elected Lords, that go further than proposed by Labour
The idea that Cameron could try to corner the Lib Dems ... I do not think is likely to work. It would be perfectly reasonable for us to support the things we agree with and oppose those we do not. If that meant voting down a Queen's Speech (if we were forced into that position) then so be it.