Major says unity is key to poll success

Election alert: 'Campaign has begun to inherit strongest economy for decades'

John Major put his party on election alert last night in a victory speech that warned MPs and senior activists: "United we will win the next election. Divided we may not."

Mr Major insisted that with the leadership contest behind the party, it now had a chance to "build on the strongest economic position our country has seen for decades" and that it would be a "tragedy" if it was not the Conservative Party which reaped the benefit.

The Prime Minister said he had "not a shred of doubt that the general election campaign has begun" and that the economic recovery meant that the political "prize" was more important than in previous elections. He added: "The next government will inherit the strongest economy this country has seen for very many years."

Mr Major said at a rally in which the audience included the Cabinet, a large majority of MPs and his leadership opponents, that the party's ability to bury its divisions was crucial to its election prospects. Despite the bitterness among the party's hard right over the leftward turn of Mr Major's Cabinet appointments, Mr Redwood went out of his way at Prime Minister's Questions to assure him that he wanted "to see a Conservative general election victory".

But the new deputy Prime Minister, Michael Heseltine, yesterday consolidated Mr Major's new Cabinet choices with an acknowledgement that the Government had not sought to appease Euroscepticism. "The party doesn't want that," he declared on the BBC Radio Today programme. "And the country wouldn't tolerate it."

Mr Major, however, insisted last night in an apparently conciliatory reference to his opponents in the leadership campaign: "I am not a factional politician. The Government will continue to include and represent all parts of our party. Conservatism is a broad river, fed by many tributaries." In his speech last night, Mr Major again emphasised his goals of eventually eliminating inheritance and capital gains tax.

Michael Heseltine is to be given his own session of questions in the Commons to ensure that the Deputy Prime Minister and First Secretary has a regular starring role in Parliament.

Commons procedures were being scrutinised by government officials last night to create space for him in the parliamentary timetable. He will be ensured his own show, for at least 25 minutes once a month.

But Downing Street could not say last night whether or not Mr Heseltine would deputise for Mr Major at Prime Minister's Question Time.