If I vote for a Labour candidate in a seat in which Labour has a large share of the vote, I can rank every other candidate to my heart’s content but those votes will never be counted, no difference.
By contrast, if I vote for a fringe party that gets knocked out early, my second and third preferences can end up deciding the election.
Under those circumstances, the second and third preferences of fringe parties (some of whom may be moderate, some of whom may be extremists) become all-powerful, so candidates for the mainstream parties will have to pitch for them. Hence, under AV, the minor parties wield more power – both in the ballot box and on the stump.
This is simply the wrong way to look at things. In the first round, you vote for labour and some minority party is knocked out. In the second round, you get to vote again (the same as everyone else) and you stick with labour, and so on.
People who vote for a minority party which then gets knocked out get to indicate their second preference (e.g. BNP 1st, UKIP 2nd) – but that does not mean they get more voting power, it simply means that their political views are not held by a majority of the public.
Mainstream parties are in no way forced to pander to the ‘nutters’. If they don’t, then the nutters will only vote for their minority party – which will be knocked out a certain point, and then their vote is discounted.
Edit: in case it’s not obvious, I’ll be voting Yes. And I sincerely hope as many people on here as possible engage in the debate and choose the system they find to be most representative of the people (i.e. Yes 😛 )