Banc, the agency formerly known as Bean Andrews Norways Cramphorn, is to produce the election campaign advertising for the Liberal Democrat Party.
This marks a turnaround from the party's position of creating the ads in-house for the 1997 election.
Banc was given the work without a pitch and it will advise on communications and handle the party's print, poster and TV ads.
The Liberal Democrats spent pounds 3 million in the last election and look to spend a similar sum in this year's election, expected in May.
Liberal Democrat director of communications, David Walter, claims the party will adopt a positive approach to the campaign that will not underestimate the intelligence of the electorate.
'We are delighted to have Banc working with us to help communicate our themes and views for the general election. Banc is in tune with our approach. The agency's track record, experience and flair are of enormous value to us,' Walter said. He also added that the agency had approached the party and started discussions. 'Banc offered its services to us and we were impressed with the work.'
The media agency GJR is thought to be in talks with the Liberal Democrats to handle the media account.
The Tory Party's election drive broke this week with a pounds 1.5 million poster campaign created by Yellow M. Labour's main election campaign, through TBWA/London, has yet to break.