Labour sounds the retreat over its list of target seats

Labour Uncut reports a "reprioritisation" of the party's list of 106 key seats:

Underpinning this reappraisal are two broader developments: first, the increasing effort Labour is having to devote to retaining marginal seats it already holds and second, the party’s flagging performance in the south. 

At the last election Labour won 17 seats where the majority was only in three figures. Although Labour’s vote in these seats will undoubtedly be bolstered by defections from the Lib Dems, there is a real danger that anti-Labour supporters of the coalition parties will switch their votes to maximise the chances for a Labour defeat – after all, both the Tories and the Lib Dems will be standing on the same economic record. 

In 2011, when Debbie Abrahams won the Oldham East and Saddleworth by-election, it was notable that the Lib Dem vote held up, sustained largely by massive switching from the Tories. 

If this type of behaviour were replicated at the next election then Labour could face losing large numbers of seats, with shadow cabinet members like Gloria De Piero, who had a majority at the last election of 192, under threat.

Labour Uncut goes on to name Dover, Crawley and Battersea as examples of Southern seats where the party is struggling to make progress.

It quotes a party source as saying that Labour’s realistic target list is nearer 60 than 106, and concludes:

In effect, Labour is now targeting a coalition with the Lib Dems following the next election.

This would certainly explain Ed Balls' wooing of Nick Clegg, though perhaps not Ed Miliband's new-found wish to save the middle class.