Chuka Umunna has opened the door to a coalition with the Labour Party if Jeremy Corbyn was not its leader.
The Liberal Democrats ' foreign affairs spokesman said that the party could not consider propping up either of the main parties as they are "currently configured".
It comes after Lib Dem leader Jo Swinson said she is "absolutely categorically ruling out" Liberal Democrat votes putting Mr Corbyn into Number 10.
Ms Swinson says she is campaigning to be Prime Minister but behind the scenes the party accepts that they may find themselves in the role of kingmaker - as Nick Clegg did in 2010.
Launching the party's election campaig, she said: "On so many grounds, Jeremy Corbyn is not fit for the job of Prime Minister. On the biggest issue of the day, he has prevaricated and will not give a straight answer.
"Even now if you ask him whether he is Remain or Leave he will not tell you how he would vote.
"His plans for the economy would take us back to the 1970s. I believe he would be a threat to our national security."
But following her speech former Labour MP Chuka Umunna suggested his new party could work with Labour under a different leader.
The party's foreign affairs spokesman told reporters: "The two main parties as currently configured are not fit for office we are going out to be the biggest party in the House of Commons it’s up to people to decide what happens after that."
In 2010 then Liberal Democrat leader Nick Clegg said that Gordon Brown stepping down was a precondition of the party working with Labour.
In the end Clegg decided to work with David Cameron as the Tories were the largest party after the poll.
A party spokesman suggested the Lib Dems' issues with Labour and the Tories goes further than just their leader.
He said: "It’s about what those parties represent in British politics."
Adding: "It is about the place where that party stands - Jeremy Corbyn has taken the Labour Party off to the far left and that is the place where that party now exists.
"In the same way that Boris Johnson has taken his party off to the far right."
Ms Swinson, who has a fight to keep the East Dubartonshire seat she won back in 2017, said she never thought she would be standing as a candidate for prime minister but said she is "absolutely certain" she would do a better job than Boris Johnson and Jeremy Corbyn.
But under her leadership the Liberal Democrats have risen to poll heights rarely seen since the peak of "Clegg-mania" almost a decade ago.
She claims that a small shift in poll numbers could see the the Lib Dems sweep "hundreds" of seats in an election battle that will test a leader who only took over the party in July.
Ms Swinson said:"Our country needs us to be more ambitious right now - and we are rising to that challenge.
"It is not about the red team or the blue team, because on this issue they merge into one - both Labour and the Conservatives want to negotiate and deliver Brexit ."
Asked how she would bring the country together if she plans to disregard the vote of millions of people in the 2016 referendum, Jo Swinson said: "As Liberal Democrats we are standing up for what we believe in, and being very honest and straightforward about that.
"I recognise there are differences of opinion on this issue, and I think people recognise and appreciate that we are consistent and we are firm in what we are standing for."
Ms Swinson added: "There isn't a Brexit that commands a majority. We want to stop Brexit and if we get a majority Liberal Democrat government that is exactly what we'll do.
"And we have led the campaign for a People's Vote, which would put a specific Brexit deal to the public and say these are the details, this is what had been negotiated, do you want to go ahead with that specific Brexit deal, and I believe in the circumstances people would vote to remain because I don't think there is a majority for any specific Brexit deal."
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