VINCE Cable has insisted he is a credible candidate to be Britain’s next Prime Minister, saying his elevation to the role following the next General Election is “perfectly plausible”.

Speaking as the party faithful gathered in Bournemouth for their annual conference, he described the Liberal Democrats as the “moderate and common sense alternative”.

Sir Vince’s assertion about his chances of gaining power came as he warned how Britain was "sleepwalking" towards another economic crisis, becoming hooked on unsustainable debt

Despite heading a party with just 12 MPs, including four in Scotland, the 74-year-old party leader insisted he could replace Theresa May in Downing Street.

“It's perfectly plausible, actually,” he told BBC 1’s Andrew Marr Show. "As leader of the third UK party, my job is to be the alternative Prime Minister. British politics is in a remarkable state of flux. You have got the Conservative Party in an open civil war;[a] complete breakdown of discipline.

"You have got the Labour Party in a suppressed civil war. They had a good election and Jeremy Corbyn is currently riding high. But, we know under the surface there is enormous discontent about the extreme left. I, and my party, are the alternative."

Asked if the Lib Dems could get a Commons majority, Sir Vince said: "It's possible that we could break through. If British party politics starts to break up, if the traditional structures start to break up, and that could well happen, we are extremely well positioned with moderate, sensible policies.

"I am very confident talking about being an alternative prime minister."

Sir Ed Davey, the party’s home affairs spokesman, also talked up Sir Vince's Downing Street ambitions; something his predecessor, Tim Farron never had, insisting at the last election he wanted to be Leader of the Opposition.

He told Sky News: "Under Vince we have someone who is seen as a future prime minister. If you put him up against Theresa May or Jeremy Corbyn, the majority of people would rather have Vince in Number 10 because he comes with huge credibility, particularly on the economy."

Sir Vince said going back on the Lib Dem pledge not to raise tuition costs had damaged support as he suggested a graduate tax could be a better alternative to fees.

The former Business Secretary is using his party’s conference to position the Lib Dems as the voice of Remain voters as he rejected talk of the possibility of a soft Brexit.

Sir Vince said public opinion had not changed much since the Brexit referendum but it would once the economic reality of withdrawal from the EU sank in.

He said voters should be offered a “first referendum on the facts” once the terms of a Brexit deal were known so that the UK could vote on the option of staying in the EU.

Last week, the Lib Dem leader told The Herald how the SNP, which also wants to see the UK remain in the EU, should back his party’s aim to get a second vote on Brexit.

Meanwhile, Sir Vince warned about another economic crisis and suggested the UK economy needed a new approach to prevent it being dragged into recession as Britain edges closer to Brexit.

As the banking industry marked a decade this week since Northern Rock marked the start of the financial crisis, the Lib Dem leader, who was widely credited with predicting the credit crunch of 2008, said: "Ten years on since the collapse of Northern Rock, Britain is sleepwalking into another economic crisis.

"Banks are now safer and better capitalised and the Liberal Democrat policy in government of splitting retail banking from more risky 'casino banking' has added to stability.

"But despite progress made during the Coalition years, the country has still not fully recovered from the economic heart attack it suffered a decade ago."

Sir Vince added: "The economy remains overly reliant on consumer spending fuelled by unsustainable debt. Living standards are being eroded by the fall in the pound, while the uncertainty caused by Brexit is undermining business investment and consumer confidence.

"A bold new approach is needed to steady the ship, drive up productivity and living standards, and prevent the economy from tipping into recession,” he added.

Today at conference, the party called on the UK Government to lift the one per cent pay cap on the armed forces immediately to address a growing recruitment crisis.

Judith Jolly, the party’s defence spokewoman, said there needed to be better support for families of those who served as well as new recruitment initiatives for technical skills.

“We cannot afford to sit back and watch this situation deteriorate further. These actions are critical for the security of our country, and to ensure that those who serve and their families are given the support they deserve,” she added.

Today, Jo Swinson, the deputy leader, will give a keynote speech and there will be a question and answer session with Sir Vince.

Willie Rennie, the Scottish Liberal Democrat leader, is due to speak tomorrow when there will also be a keynote debate on Brexit.