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He had all along been convinced that the conflict had been unnecessarily provoked, both by Chamberlain and the Cape Government. He accepted the war, declaring that he would not in any way hinder the efforts of British arms, but also repeated that he would not withdraw any of his previous criticisms of British policy. As the war progressed, Campbell-Bannerman increasingly leaned to the Radical position, especially after he learned of the civilian concentration camps being used in the Transvaal. On the right of the party, a powerful minority of leading Liberals, including Asquith, Grey, Haldane and Fowler, were in support of Rosebery's Imperialist position.

While Campbell-Bannerman, Asquith, Haldane and Sir Edward Grey abstained, 186 Liberals went into the opposition lobby. The crisis became more serious when Rosebery (together, with Asquith, a member of the Imperial Federation League) seemed to be emerging from retirement in order to mount a campaign that would unite the pro-Imperialist elements in a breakaway party. In July 1900 some 41 Liberal MPs actually voted with the Unionists against the 29 members of their own party who supported Sir Wilfrid Lawson's 'pro-Boer' amendment.

Finally, the Cabinet seemed to have lost touch with its supporters. Dissent was rife within the party, most particularly among the Celtic Radicals at Westminster who were bitterly disappointed at the seeming inactivity of the administration over reforms for Scotland and Wales. In 1893 one Scottish MP resigned his seat (subsequently lost to a Liberal Unionist candidate) in protest against the government's failure to introduce legislation to protect the crofters. In 1894 Lloyd George, already the most vocal of the Welsh Radicals, resigned the Liberal whip along with three of his colleagues.

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