[6][7] The SDP was founded on 26 March 1981 by four senior Labour Party moderates, dubbed the "Gang of Four":[8] Roy Jenkins, David Owen, Bill Rodgers, and Shirley Williams, who issued the Limehouse Declaration.

Jenkins argued the necessity for a realignment in British politics, and discussed whether this could be brought about from within the existing Liberal Party, or from a new group driven by European principles of social democracy.

[12] In Taverne's case, he had been fighting efforts by the Lincoln Constituency Labour Party to deselect him largely over his support for British membership of the European Communities.

[13] He founded the short lived Campaign for Social Democracy (CFSD) thereafter, and wrote a book about events surrounding the by-election called The Future of the Left – Lincoln and After (1972).

On 25 January 1981, leading figures from the Labour Party (Roy Jenkins, David Owen, Shirley Williams and Bill Rodgers, known collectively as the "Gang of Four") launched the Council for Social Democracy, after outlining their policies in what became known as the Limehouse Declaration.

[16] Former Labour Party deputy leader, Baron George-Brown also announced his membership of the Council for Social Democracy.

The constitution set out the establishment of a "Council for Social Democracy" (CSD) which was, in effect, the party's standing conference.

Williams and Jenkins were not at the time Members of Parliament, but were elected to the House of Commons at by-elections in Crosby and Glasgow Hillhead respectively.

[citation needed] At the party's first electoral contest, Jenkins narrowly failed to win a by-election at Warrington in July 1981, describing it as his "first defeat (in many years), but by far my greatest victory".

Senior Liberal MP for Rochdale Cyril Smith caused some embarrassment, however, by publicly stating that the SDP "should be strangled at birth".

[24] During an era of widescale unemployment and public disillusionment with the two main parties—Labour and the Conservatives—the Alliance achieved considerable success at parliamentary by-elections.

[25] That same year, David Steel addressed the Liberal Party conference with the phrase "Go back to your constituencies, and prepare for government!

"[26] In early 1982, after public disagreements over who could fight which seats in the forthcoming election, the poll rating dipped, but the party remained ahead of both Labour and the Conservatives.

However, following the outbreak of the Falklands War on 2 April 1982, the Conservative government of Margaret Thatcher soared from third to first place in the public opinion polls.

By this stage, however, the SDP already had 28 MPs in parliament, virtually all of them defectors from Labour, joined by one Conservative MP and two by-election winners.

The party's leader, Roy Jenkins, managed to retain his seat at Glasgow Hillhead, but SDP President Shirley Williams was defeated at Crosby (which she had won at a by-election in November 1981) as a result of unfavourable boundary changes.

[27] Following the result, Jenkins was pressured to step down as leader of the SDP by David Owen, MP of Plymouth Devonport who between 1974 and 1979 had been a Labour Government Minister under Harold Wilson and James Callaghan.

[28] Owen was more sceptical about close relations with the Liberals than his predecessor Roy Jenkins, and favoured retaining the party's distinct identity.

This in turn led to grassroots tensions in some areas between Liberal and SDP branches that impaired their ability to mount joint campaigns successfully.

Such cross-party feuding was part of the reason for Jenkins losing his Glasgow Hillhead seat to George Galloway of the Labour Party in 1987.

The proposal, also supported by Williams and Rodgers, was fiercely opposed by Owen, who argued that such a merger would not be accepted by the electorate, and would not reverse their declining share of the vote.

Following the dissolution of the SDP, a number of members endorsed Conservative Prime Minister John Major for the 1992 general election.