The Liberal Democrats are putting feelers out to potential Conservative defectors in an attempt to persuade them to quit the Tories as a protest against Iain Duncan Smith's appointment of leading Eurosceptics to his front bench.
Charles Kennedy, the Lib Dem leader, will use his keynote speech at this week's party's conference in Bournemouth to encourage disaffected Tories to join his party. He will claim it has replaced the Conservatives as the effective opposition at Westminster.
A senior Lib Dem source close to Mr Kennedy said that behind-the-scenes contacts with potential defectors had been going on "for some time".
Tory moderates are furious with Mr Duncan Smith for appointing arch anti-euro rebel Bill Cash to his front bench. The threat of a backlash was increased by the sacking of former Portillo and Clarke supporter Steve Norris as vice-chairman of the party for warning that Mr Duncan Smith's victory would lead to more Tories deserting.
The sour mood has led some Tories to boycott the party conference in Blackpool in October. Tory MEPs are claiming there will be a serious split if the anti-euro wing persists in an attempt to break away from the moderate Conservative grouping in the European Parliament.
Charles Clarke, the chairman of the Labour Party, said Mr Duncan Smith had left some of his most talented MPs out of his shadow cabinet because they were pro-euro or had backed Ken Clarke. They include David Curry, Ian Taylor, Andrew Lansley and Andrew Tyrie, Mr Clarke's campaign manager. "They are far more competent than the team appointed by Iain Duncan Smith," said.
Leading pro-euro Tories privately have ruled out plans to create a second SDP-style breakaway party for moderates because they know they would lose their seats unless electoral reform was introduced. Paddy Ashdown reveals in a new volume of diaries that he tipped off Tony Blair that Ken Clarke could start a breakaway party. Mr Blair had asked Mr Ashdown to see whether Mr Clarke would defect after the Tories' 1andslide 1997 general election defeat. But according to Mr Ashdown, Mr Clarke said: "I will always be a Tory. They might leave me but I will never leave them."
Mr Ashdown told Mr Blair: "I got the impression that he could, if things turned out really badly, set up a different party, say, under PR (which he opposes) but not join a different party."
The Lib Dems are not expecting any high-profile defections but they believe many grassroots Tories, including councillors, are so dismayed by the Eurosceptic take-over that they will leave the party.
Mr Kennedy's decision to end meetings with Labour Cabinet ministers – a result of Mr Blair's refusal to name a date for a PR referendum – will also allow him to avoid the annual protests by Lib Dem traditionalists over possible Lib-Lab pacts at his party's conference.
One of the key debates on the margins of the conference will be over the strategy for distancing the Lib Dems from New Labour.
Ashdown's diary review, LifeEtc, page 16Reuse content