The Thatcherite 92 group of Tory MPs warned party leaders after a meeting at Westminster that the Prime Minister needed to give the Government a sharper cutting edge, with more right wingers in the Cabinet. 'We are in danger of looking like the right wing of the Labour Party,' one said.
West Country Tory MPs also met to discuss their strategy for fighting back against the threat to their seats from the Liberal Democrats, following the county council losses and the Newbury by-election defeat.
Whips were also reporting a loss of nerve among backbenchers who were urging ministers to scrap plans to privatise the Royal Mail and deregulate London buses.
The Tory jitters were underlined by the threat of a government defeat on the Bill to offer British Rail passenger services to private operators, after John MacGregor, the Secretary of State for Transport, rejected a proposed Tory backbench amendment giving the BR board the right to bid for franchises.
'The real problem is the ministers have failed properly to sell the policy for the privatisation of BR. There is widespread concern about it, but when you explain it for 20 minutes, a lot of the fears disappear,' one of the potential Tory rebels said.
The amendment to the BR Bill was drafted by the late Robert Adley, the Tory MP for Christchurch, who died last week, and its supporters, now led by Sir Keith Speed, a former minister, warned that they may have 20 names - more than enough to defeat the Government with Labour support.
But government sources said that they expected the rebellion to be cut to a handful of Tories, allowing the Government narrowly to avoid defeat in the vote that may be forced on the report stage of the Bill next Monday.
Mr MacGregor said: 'We have discussed this at great length. This is not something we would wish to accept and I hope I can persuade Keith. We are very keen to encourage management employee buy-outs. We have got 30 bids . . . There will be a very substantial opportunity for people running the railways to bid. We don't think this is the way to proceed.'
However, Mr MacGregor may meet other detailed Tory backbench concerns, including the need to protect travelcards.
Later this week he will reassure critics about the pension rights for existing British Rail employees. But his friends denied this amounted to another government U-turn.
Mr MacGregor is also fighting Treasury objections to public funding for the pounds 1.8bn Crossrail project. Its fate will be decided tomorrow at a Cabinet committee chaired by the Prime Minister, who is said to be determined that it will go ahead.
Mr Major will underline his commitment to private-sector investment in public-sector schemes and the need to give industry the right conditions to make profits.Reuse content