Former Labour and Change UK MP Chuka Umunna has joined the Lib Dems.
The Streatham MP told the BBC he had been “wrong” to think “millions of politically homeless people… wanted a new party.”
Mr Umunna said he had also “massively underestimated just how difficult it is to set up a fully-fledged new party without an existing infrastructure”.
He was one of six Change UK MPs to quit last week, after it gained only 3.4% of the vote in the European elections.
The pro-EU Lib Dems saw a surge in support in the same elections, coming second after the Brexit Party.
Former shadow business secretary Mr Umunna first revealed his decision to the Times, taking the Lib Dems’ total number of MPs to 12.
Mr Umunna, who had previously criticised the Lib Dems for “enabling Tory austerity” while in coalition with them, acknowledged that not everyone in the party would welcome his arrival.
However, he told BBC Radio 4’s Today programme “things have changed” as the Lib Dems had voted against every single Conservative budget since 2015 and stood on an anti-austerity manifesto in 2017.
“If you want to end austerity you cannot do that if you are going to sponsor Brexit in the way that the two main parties are doing,” he added.
Mr Umunna said he had realised “there isn’t room for more than one centre ground option” in British politics, adding that he believed there were “a good handful” of Conservative and Labour MPs who knew their parties were “broken” and could also be prepared to join the Lib Dems.
The MP, who withdrew from the 2015 Labour leadership contest days after announcing his candidacy, also ruled out standing for Lib Dem leader. He told the Times he did not want to take sides between the two contenders to replace Sir Vince Cable, Jo Swinson and Ed Davey, adding: “I’m a newbie.”
Welcoming him, Sir Vince said: “Chuka and I have worked together effectively for many months, campaigning for a People’s Vote and to stop Brexit.
“I know that he will be a great asset to our party not just on Brexit, but in fighting for the liberal and social democratic values that we share.”
Labour Party chairman Ian Lavery called for a by-election in Mr Ummuna’s constituency, tweeting: “Three parties in as many months…who’s next?
“Put your immense popularity to the good people of Streatham…let’s have a PV [People’s Vote] on you and your principles.”
Change UK – formerly known as The Independent Group – was formed earlier this year by MPs who quit Labour and the Conservatives.
It pledged to push for any Brexit deal negotiated by the government to be voted on at a referendum – or “People’s Vote” – in which it would campaign for the UK to remain in the EU.
After last month’s European Parliament elections, six of its 11 MPs quit. On Thursday it applied to change its name to The Independent Group for Change, after a dispute with petitions website Change.org.