Thatcher urges Tories to stick with Major

Conservatives in crisis: Defiant Major tries to focus party on election as defector takes her place on the Opposition benches
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Baroness Thatcher will today tell the Conservative Party it can win the general election if it follows the right of centre course mapped out by John Major and rediscovers the principles of Thatcherism.

Speaking after John Major yesterday launched a valiant effort to focus a shell-shocked Tory party on the electoral battle ahead, Lady Thatcher will also make it clear that, in her view, the leadership has made mistakes since her departure, which is likely to be seen as a clear signal of her dismay at the increase in taxes by Kenneth Clarke.

The intervention of the former Prime Minister will risk intensifying the rift between the left and right wings of the party after the defection of One Nation Tories Alan Howarth and Emma Nicholson.

Friends of Lady Thatcher said last night that she had been consulting widely on the speech and intended it to be seen as her strongest message of support for John Major since he became leader.

"She was urged to make it a domestic policy speech. She wants to show absolute support for the Prime Minister. She doesn't want it to be read as a further rift in the party," said one Tory MP close to her.

She will use the Keith Joseph Memorial lecture - in memory of her ideological mentor - to reinforce her belief that the Conservatives can win providing they remain true to the policies she began: privatisation, low inflation, and low taxation.

Mr Major insisted in his interview on Breakfast with Frost at the weekend that he was leading a centre-right party, in spite of the criticism from the left-of-centre leaders of the Tory Macleod group at the leadership rhetoric on Europe.

Although the left of the party has raised their profile, with the fall in the Prime Minister's majority to five votes, the right are still firmly in the ascendancy. Lady Thatcher was planning to praise some leading right- wing members of the Cabinet, including Michael Howard and Michael Portillo, who has angered the One Nation Tories since Ms Nicholson's shock defection.

She accused Mr Major of "drifting with the tide" in her memoirs, but Lady Thatcher's advisers said she was clearly determined to stiffen the sinews of the party for the run-up to the general election.

Those close to Mr Major said he was privately convinced by three past general elections - 1964, 1970 and 1992 - that he is right to battle on until the spring next year. In 1964, the Tories narrowly lost by waiting; in 1970 Labour could have won if they had waited; and in 1992 he won by waiting until the last minute.

Going now would be tantamount to suicide, but the Prime Minister is hoping that the return to tax cutting in the last Budget will steer the party back to the winning course. Mrs Thatcher will tell her audience of senior party figures, including Mr Portillo and John Redwood, that Tony Blair, the Labour leader, lacks substance and the Tories' chances will improve by waiting.

This view is shared by Mr Major who yesterday brushed aside calls from Mr Blair to call an immediate election and opposition gibes about Miss Nicholson's departure to declare that Labour had no response "to the economic prospects that lie ahead of us".

He said of Miss Nicholson's defection, which has sparked off a fresh wave of infighting between the party's left and right wings: "I believe that she has made a decision which she will come to regret."

But Miss Nicholson lost no time in renewing her long-distance slanging match with Michael Portillo, the Secretary of State for Defence, currently in the Far East, who outraged some pro-European Tories with the vehemence of his dismissal of the departing MP.

Miss Nicholson accused the Secretary of State of being "cowardly" and added that the "Michael Portillo gang who are running the Conservative Party at the moment" would not speak to her after she once voted against the Government.

While rejecting her analysis, some senior MPs on the centre left of the party - including at least one minister - expressed irritation at Mr Portillo's contention that a campaign had been "whipped up" against him.

The Tory jitters were exacerbated by - apparently baseless - rumours that the discontented Tory MP Peter Thurnham might resign the party whip after telling the Manchester Evening News that ministers could not rely on his automatic support in the voting lobbies. "I will take each issue on its merits," he had said.