Maurice Saatchi is joint Tory chairman

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Maurice Saatchi, the advertising guru who helped Margaret Thatcher to win power in 1979, was appointed a chairman of the Conservatives last night with a brief to shake up the party's headquarters.

In the the first appointments to his team since he was elected Tory leader, Michael Howard dropped Theresa May as chairman and split her post between Lord Saatchi and Liam Fox, who leaves his job as shadow Health Secretary. Lord Saatchi, who devised the "Labour isn't working" dole-queue poster in 1979, will take charge at Conservative Central Office. He is likely to purge the staff and there is even speculation the party will leave its Smith Square headquarters in Westminster.

Dr Fox, a former GP who ran the campaign that saw Mr Howard appointed unopposed, will be responsible for communications and the party's grass roots. He will aim to "reinvigorate" the Tories' media operation, integrating it with the campaigns and policy units.

Dr Fox said: "In the 1980s, we had a political machine that people from other countries used to come and look at, which other parties were terrified of, and we need to get back there." He called the staffing structure at Central Office "the flow diagram of your nightmares".Mr Howard decided the work of the party chairman was spread too thinly because it involved running Central Office and heading the party's campaigns.

The new leader will announce his Shadow Cabinet today and is expected to reward members of his campaign team, including Oliver Letwin, the shadow Home Secretary. Mr Howard has also asked the former leader William Hague to return to the front bench.

Lord Saatchi, 57, is a Treasury spokesman in the Lords and was an adviser to Iain Duncan Smith, Mr Howard's predecessor. He will be the first chairman in recent times not to be a frontline politician.

The party's former treasurer Lord Ashcroft is to donate £2m to the party. Other donors are expected to follow suit.

Labour still leads the Tories by 36 per cent to 30, unchanged since last month, according to the first poll since Mr Howard took over. But 30 per cent of Tory voters said the leadership change made it likely the party would do "much better", according to the Populus poll.