The business secretary (pictured), speaking at a fringe meeting following the third day of the Liberal Democrat autumn conference, said a separation is a “sensitive” issue that has not yet been broached by senior members of either party.

But the Independent newspaper, which, along with RSA Insurance, sponsored Monday night’s event, quoted Cable saying of an early split: “It is certainly possible. We are not at the stage of talking about that process. It is obviously a very sensitive one. It has got to be led by the leader. We have not yet had those conversations.”

Asked later on the BBC’s Newsnight programme if the coalition could end in 12 months’ time, Cable said: “All kind of things were possible but I am not going to able to give you any useful information on that.”

It represents the first time a senior Lib Dem party member has discussed the possibility of an early break-up of the arrangement. As recently as May, party leader and Deputy Prime Minister Nick Clegg said he “could not envisage any circumstances” in which there would be an early election.

The coalition government – a power-sharing arrangement between the Conservative and Liberal Democrat parties – was established in May 2010 following a hung parliament result after the general election, which left the Conservatives some 20 seats short of a majority. It is the first coalition in the UK since the Churchill War ministry of the Second World War.