WI Labour-LibDem coalition formed after 2010 election

What if, following the 2010 hung parliament result, Labour had formed a coalition government with the Liberal Democrats? This would require a 'rainbow coalition' to reach an overall majority. With Sinn Fein abstentions, 323 or maybe even slightly lower(after the Speaker and Deputy Speaker) would make up an effective majority in the House. Labour+LibDem=315 seats. Then add on Plaid Cymru, which could probably get the 300 million pounds for Wales as the DUP did with Theresa May IOTL, so 318 seats, plus the SDLP, Sylvia Hermon and the Greens for 323 seats, and 329 with the SNP's 6 seat MPs. Together, the government has an 8-seat majority.

How could such a deal come together? It seemed to be close in the OTL 2010 negotiations, however there were serious obstacles to a deal, and it was unclear how seriously either one took the prospect. Gordon Brown would have resigned, and IMO Alan Johnson would have become PM(https://www.theguardian.com/politics/2013/apr/28/alan-johnson-prime-minister-almost), and could have been a unifying figure for the coalition. The future of electoral reform seems unclear, as the LibDem demand of AV without a referendum never seemed palatable, though Labour did propose adding a question on PR to the referendum. How would this government have handled the economy? Some austerity was probably inevitable, but likely the Labour-LibDem cuts would be less than the Tory-LibDem cuts. What would happen to David Cameron, having failed to win an overall majority or form a government? Could he hang on, having gained nearly 100 seats, or would he lose the Tory leadership, and if so who would replace him? How long would this government last? What would be the outcome of the next UK election? What if?
 
From my understanding, the Lib Dems largely used the negotiations with Labour as a way of gaining leverage with the Tories. A coalition with Labour was very much unlikely, not least because of the arithmetic. There are so many players involved that it wouldn't take long for one of them to object to something the government does and then withdraw its support. There would probably be a new election within a year, and the Tories would win a majority.

Labour and the Lib Dems agreed on the need to keep the fiscal stimulus going until 2012, so they probably wouldn't get round to actually implementing austerity anyway. Similarly, if there were a referendum on PR, it would probably be lost given that the public would see it as a concession to the Lib Dems, who would be unpopular for having kept Labour in office whilst also relying on buying off the support of Plaid and the SNP. In terms of who would replace Brown, Johnson would probably run, but that doesn't mean that David Miliband wouldn't, and Ed or someone else more toward the left would also be a contender. So I don't think that Brown's successor is clear cut.

Cameron would probably stay on in anticipation of a new election, and also because the Conservatives would likely try and build up a narrative that they had been robbed of power. He would be PM within a couple of years, and with a comfortable majority. The only chance I see for a Labour-Lib Dem coalition is if they fight the election on the same coupon, unlikely given that Clegg had ruled that out with the Tories IOTL.
 
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I do think it's unlikely to last the full 5 years, and would probably be like the late 1970s in that regard. However I don't think an immediate collapse is likely and it could go through to 2013 or 2014. Any more thoughts?
 
A "progressive coalition" is possible on paper but it requires the near-unanimous support of the MP's from so many diverse parties, and even so has such a tiny majority (and one likely to be further reduced or even eliminated in by-elections) that it just does not seem workable to me.
 
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