Senior Conservative sources said the Cabinet would concentrate on a positive programme, highlighting 'the rhetoric and the reality' in Labour's record, but the agenda set for next week's party conference threatens a shift to the right.
Michael Heseltine, the President of the Board of Trade, clearly warned against such a shift. He said: 'What we have to do is make absolutely sure we are arguing our case and above all that we don't lose our nerve.'
Ministers were wrong-footed by Tony Blair's Clause IV conversion, and the Labour leadership defeat came after the 20-minute Cabinet strategy meeting.
Kenneth Clarke, the Chancellor, raised potential diplomatic problems for Mr Major at his next meeting with Bill Clinton by rubbishing Mr Blair as 'Clintonesque'.
The defeat for Mr Blair threw a lifeline to ministers, already considering redrafting their speeches.
Ministers will use yesterday's Clause IV vote to portray Mr Blair as a gut-socialist. 'We will not say he is a closet Marxist, or a closet Conservative. That would not be credible. We will say what he is, which is a socialist,' said one senior Tory source after the meeting.
The underlying theme of the Tory conference will be a united attempt by the Cabinet to seek credit for the Government's success in reducing inflation, cutting some crime figures, creating opt- out schools and reducing NHS waiting lists.
But senior party sources played down expectations of a revivalist conference on the lines of the 1986 jamboree, also at Bournemouth, which paved the way for victory in the following year.
Ministerial sources also said there would be no string of major announcements. There were strong signs that the Government was getting cold feet over announcing its plans to privatise the Post Office, which is likely to be delayed until after the conference.
Extending nursery education, possibly down to three-year-olds, will be expensive and may have to wait for the November Budget.
Michael Howard, the Home Secretary, facing a difficult conference, will announce a new wave of measures to combat crime and toughen the regime in prisons.
He led a Cabinet counter-attack yesterday by publishing Tory party research to attack Mr Blair's refusal to support the Government on the Criminal Justice Bill.
Virginia Bottomley, the Health Secretary, confirmed she will announce a 'dramatic' increase in the number of GP fundholders to cover all patients. All fundholders are to be offered budgets, but Government sources denied Labour allegations that it would be made compulsory.
As part of the campaign to show Labour facing two ways at once, John Redwood, Secretary of State for Wales, accused Mr Blair of adopting his policy for raising teaching standards in schools, but maintained that it clashed with official Labour policy.Reuse content