Tories back in line - Thatcher: Portillo endorsed as a strong future leadership candidate

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BARONESS Thatcher yesterday coupled an enthusiastic public endorsement of Michael Portillo as a future Tory leadership candidate with a call for the party to support John Major now that it was back on the 'true path of Conservatism'.

In what will be seen as a fresh, if guarded, effort to construct a truce with her successor on the eve of the Commons' return today, the former prime minister proclaimed that 'Thatcherism is alive and well' and that Mr Major had now taken the party back to 'fundamental principles'.

Asked specifically in a BBC TV interview with Sir David Frost whether Mr Portillo, the Treasury Chief Secretary, was her favoured successor to Mr Major, she said emphatically that he was a 'very strong runner' and that 'Michael had never faltered in his beliefs'.

She said that she hoped the leadership would not be an issue for 'some time'and added: 'It is very destabilising for a prime minister when they are constantly talking about who is going to be next.

She said of Mr Major: 'He has carried out his duties well.' Asked whether he had become a great prime minister yet, Lady Thatcher replied: 'Give him a little bit more time, a little more time - and no threat of leadership elections.'

She continued: 'They should put all their effort on supporting the Prime Minister and on seeing the policies of the next Queen's Speech through Parliament and on sorting out the finances.'

Asked what had led to a 'sea change' in her attitude to Mr Major she retorted: 'The sea-change came with his speech at this party conference and also speeches made by other Cabinet ministers.'

Lady Thatcher's remarks coincided with the release of her memoirs, in which she suggests that Mr Major did not start as a man of the right and in which she says he hesitated before promising his support for her in a second leadership ballot in November 1990. The unspoken implication is that she will continue to back him as long as the party maintains the rightward shift she believes it made at Blackpool.

Making it clear that she had no intention of being silent on political issues, she said that 'Granny will always be there in her views'.

She immediately weighed into the highest profile conflict in the current public spending round by asserting the dangers of further cuts in defence.

Although Lady Thatcher insisted that 'it was a great mistake' to think people wanted 'more and more and more spending' she declared: 'To weaken your defence below a certain level is very dangerous.'

Malcolm Rifkind, the Secretary of State for Defence, who is expected to hold a further meeting today with Kenneth Clarke, the Chancellor, is determined to resist any further cuts in the armed services without a full-scale defence review. His hand will be strengthened today at the outset of a two-day Commons debate by two Commons Defence Select Committee reports suggesting that a gap is threatening to open between the UK's military resources and the full range of its potential defence commitments.

According to senior Whitehall sources Mr Rifkind would certainly not welcome a review. But while he accepts that some economies have to be made, particularly in adminstration costs, he is expected to argue fiercely that cuts of up to pounds 1bn a year which the Treasury is believed to be seeking would have a serious operational affect and could not be contemplated without there first being a reassessment of Britain's international commitments, including that to the UN.

Arguing that the previous cuts exercise, Options for Change, has already brought savings of between pounds 3bn and pounds 4bn a year, he will reject any Treasury attempt to make further deep cuts and then hold a review afterwards.

Senior defence sources do not rule out the possibility that the armed service chiefs could exercise their right to press their case against cuts directly with the Prime Minister.

Thatcher memoirs 6, James Fenton 14, Gavyn Davies 25