Tories struggle to stem panic as European disaster looms

MICHAEL HESELTINE yesterday called on the Conservative Party to keep its nerve as it faced a further night of catastrophic defeats tomorrow in the European elections.

As the President of the Board of Trade and Kenneth Clarke, the Chancellor, tried to head off calls for John Major's resignation by blaming Thursday's by-election results on the recession, jubilant Labour campaigners said there had been a sea change against the Tories. That mood was increased by the prospect of a new Labour leader.

Cabinet sources said the Government was braced for a bout of panic in the party, when the extent of the losses became known on Monday. 'There will be headless chickens, but wiser birds will wait until November to see if Major can survive,' said one ministerial source.

The Tories had been hoping to save more than half of the 32 European seats they are defending, but the 23 per cent swing away from the Tories in five by-elections, culminating in a humiliating third place in the Tory stronghold of Eastleigh, forced Conservative strategists to recalculate. 'We now look like we may finish up with nearer 10 seats, which was our worst fear,' said a senior Tory adviser.

Losses on that scale would renew the pressure from Tory MPs with seats at risk for Mr Major to step down, although the Prime Minister made it clear well in advance of the results that he would not resign, whatever the outcome. He was resisting calls to bring forward the July Cabinet reshuffle, which could smack of panic.

There was a strong feeling among Labour campaigners that the Tories' disastrous losses heralded the beginning of the end for the Conservatives after 15 years in power. They said that it reached far beyond the dissatisfaction with Mr Major's leadership. Jack Straw, Labour's European campaign leader, said removing Mr Major would not make any difference to voters, who were angry with the whole Government.

'The anger is not reserved to Major. I think they have very serious problems. I am in no sense complacent but we are going to go from this base to beat them at the general election,' Mr Straw said.

The Chancellor, however, was confident that the 'feel-good factor' which had so far failed to reach voters would turn the tide before the general election. 'We are deeply unpopular because we have had the misfortune to be in office when the recession has lasted longer than anyone expected,' Mr Clarke said.

Mr Heseltine, a front runner to replace Mr Major, said the Prime Minister was not responsible for the losses. 'I don't think it's anything like as simple as that,' he said. 'Voters are doing what they are doing in all democracies - they are kicking the Government because they want improvements . . . There is only one way out of economic difficulty - you keep your nerve.'

Paddy Ashdown, the Liberal Democrat leader, said his party's victory in Eastleigh, with a spectacular 9,239 majority and a swing of 21.5 per cent, was a 'humiliating catastrophe' for the Government. It showed the Liberal Democrats were still the only party capable of turning 'Tory heartlands into Tory wastelands', Mr Ashdown said.

However, Liberal Democrats now fear that the strength of Labour's support could split the vote in some key European seats, cutting from six to three the seats they hope to gain from the Tories.

According to Labour strategists, the local government and by-election results, if repeated in a general election, would lead to Labour cutting a swath through Tory heartlands in the South.

Mr Straw said the Eastleigh result showed that Labour had 'broken the mould' of past by-elections, where Labour's vote had crashed to the Liberal Democrats in tactical voting to unseat Tories.

Liberal Democrats tried to make capital from the fact that Labour's vote in Eastleigh fell by 534 from the general election, but Labour was delighted to see its support hold up against the tactical squeeze.

The collapse of Conservative support in the three safe east London Labour seats of Barking, Dagenham, and Newham North East left Labour poised to make gains among blue-collar Tory voters on the borders of Essex.

Labour jubilation, page 2

(Photograph omitted)