Scots Tories in row over pounds 2m cash fund

The bitter faction fighting bedevilling the Scottish Tory party erupted again last night following a claim that the German Christian Democrats were funding a group of left-wing Tories planning a breakaway.

William Hague will today walk into this row and to try and persuade the disgruntled remnants of the Tory party in Scotland not to split from their English comrades, to continue the fight against devolution. King Canute may have set himself an easier task.

Arthur Bell, chairman of the Scottish Tory Reform Group, vehemently denied the suggestion of a pounds 2m fund, insisting that the Konrad Adenauer Foundation, an arm of the CDU, had merely provided money for a research visit to Germany.

"We are moving towards a federal system in Britain and we have to look at Conservatives elsewhere in Europe and see how they remain united while being more responsive to the public."

David McLetshie, president of the voluntary wing of the party, accused Mr Bell of "playing dangerous nationalist games" and the right-wing Lloyd Beat demanded disciplinary action against his old adversary.

The row stoked the mood of recrimination among Scots Tories, with Mr Beat fingering Mr Bell for the rumours of gay liaisons which led to the resignation of Sir Michael Hirst on the eve of the election.

Mr Hague says his primary reason for attending the conference of Scottish Tories in Perth is "to listen". Michael Ancram, the party's devolution spokesman, says he will be listening too. But so far neither has given the slightest encouragement to those urging "reform or die" on the stricken tartan Tories.

There was incredulity earlier this week when Mr Ancram repeated John Major's general election claim that devolution would lead to the break- up of the United Kingdom.

"What on earth is he playing at?" was the stunned reaction of one senior Tory who wondered if Mr Ancram, from his Devizes seat, had actually noticed the election result in Scotland. "The people have spoken. We have no MPs left here. Doesn't that tell them anything?"

Mr Hague is expected to sound more emollient when he addresses the conference this evening - underlining his personal support for a "no" vote in September's referendum while leaving dissident members free to argue a contrary case, as in 1979.

The new leader will be applauded warmly, but would be unwise to lecture the battered band. Scottish Tories are worried enough about their image as a puppet of an unsympathetic English parish. As much time will be spent agonising over ties with London as over devolution.

Michael Rifkind, the former foreign secretary, has urged a thorough-going reform with separate funding and a distinct identity - possibly with a new name, the Scottish Unionist Association. Nor does He share Mr Ancram's vision of devolution spelling the end of the UK.

Annabel Goldie, chairman of the Tories in Scotland, said "nothing is off limits" in the review of party structure.