Major dismisses talk of reshuffle: Downing Street braced for Lamont aftershock

JOHN MAJOR and his close allies yesterday moved swiftly to quash reshuffle speculation in the face of renewed pressure to promote more Thatcherites to the Cabinet as the price of continued support for his leadership.

On the eve of a meeting between officers of the right- wing 92 Group and the Prime Minister tonight - fixed before the row over hostile comments attributed to Norman Lamont - Downing Street let it be known that thoughts of a reshuffle were not on Mr Major's mind.

There were also clear signs last night that even within the 92 Group's ranks opinions were divided over the wisdom of a reshuffle before the local and European elections in May and June.

This will make it easier tonight for Mr Major to resist a shopping list of demands from backbench right-wingers, ranging from further deep cuts in public spending to an outright pledge not to return to the European exchange rate mechanism.

But while Mr Major is determined to hold on to the Prime Ministerial prerogative of reshuffling his Cabinet according to his own designs, Downing Street is bracing itself for an aftershock from Mr Lamont in the wake of a contested report in the Times magazine that Mr Lamont regards Mr Major as 'weak and hopeless'.

The former Chancellor of the Exchequer says in the BBC Radio 4 programme On the Ropes, to be broadcast on Thurday morning, that he is 'determined to fight another day', that his resignation speech last year revealed 'only a part' of his disquiet over the way government was being conducted, and that his dismissal from the Treasury was not 'John Major's finest hour'.

In what will be seen as a hint that he believes Mr Major's period as Prime Minister is finite, Mr Lamont says: 'I would like one day to return to government. I think it would be very difficult for me to work with John Major again. I don't think that's likely to happen.'

The atmosphere of Tory instability was intensified by the repeat of an exhortation to Mr Major by the normally judicious George Walden, MP for Buckingham, to shun 'moronic sloganising'. And a single Essex party branch - Mistley near Maningtree - passed a vote of no confidence in Mr Major.

Michael Portillo, Chief Secretary to the Treasury, and increasingly talked up as a right-wing contender for the leadership, was wheeled out yesterday to refute a weekend analysis - which has fuelled right-wing unrest - suggesting that public spending was now rising faster than at any time since the Barber boom in the 1970s.

Mr Portillo insisted that the real growth in total public spending of 1.4 per cent a year 'compares very favourably with the control applied by previous governments'.