Sir Ed Davey said one of his MPs was wrong to say the party is “struggling for relevance” and called the Lib Dems “the most united” party in British politics.
He said he understands how MPs get “frustrated” after they are elected to their posts and realise the limits of what they can achieve within the political system.
South Cotswolds MP Roz Savage made the remark in an essay ahead of the party’s annual conference, which kicks off on Saturday.
She also said the party must rediscover its “insurgent spirit” rather than being the “polite custodians of a system that leaves people feeling powerless”.
Party leader Sir Ed Davey donned a chef’s coat to serve up fish and chips to customers at Brighton Palace Pier as he marked his arrival for the conference.
He told the Press Association: “No, I heard Roz (Savage), and I really value her, but I think she’s wrong on that.
“If you look at our election results up and down the country, we now run more councils than the Conservatives.”
He added: “Actually, I sense we’re the most united party in British politics and that’s the impression I get going round talking to members here.
“Listen, MPs get elected and they get frustrated because they can’t change the world.
“I’m afraid that’s the political system. I’ve been used to it for a little while and people are learning about that frustration.
“But we want to change that political system. It’s holding everyone back, particularly holding our country back.”
He pointed to the £72 million in donations Reform recently secured from crypto billionaires and foreign influence from Elon Musk as examples of what changes to the system need to stop.
Sir Ed has sought to boost his party’s profile with attention-grabbing stunts and ramped them up before the last general election in which the Lib Dems returned a record number of MPs.
But it has struggled to maintain a strong presence as Reform UK and the Green Party have often managed to generate more headlines.
The party was described as “weak” in new YouGov polling by just more than half of those asked, and while the survey signalled the public largely sees the Lib Dems as moderate, 43% said it is unclear what they stand for.
It noted the Lib Dems have trailed other parties in voting intention polls for most of the last year and have seen “no real growth in support since the last general election”.
The party is seeking to firm up a platform for the next general election, with health and the economy at the centre at the four-day conference in Brighton.
Sir Ed said his party would not be caught on the back foot by a snap election if Prime Minister Andy Burnham calls one in a bid to consolidate his position.
He said the party had already set up its manifesto working group, with Cheadle MP Tom Morrison as the chairman.
Sir Ed said: “So, we’ll be ready if it comes early.
“But, you know, it still could be up to three years away. So, potentially a lot of work to do.”
He said his party has a “distinctive position” in British politics with their goals to take the UK back into the single market and the customs union, which they believe is key to growing the economy and bringing down taxes, as well as focus on the NHS.
The party is positioning itself to take on Reform as well as its typical rivals the Conservatives in upcoming polls, and Sir Ed will pitch the party as “willing to fight” at a rally on Saturday.
He will say that Reform is hoping that they will give up out of tiredness or depression, but that a “bigger orange wall” is needed to stop Nigel Farage’s path to Downing Street.
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