The appointment follows a review of Central Office initiated by Sir Norman Fowler after he became chairman of the party.
The party is to make further appointments, including a chief executive or director general, as part of its programme of introducing commercial disciplines into an organisation which has relied in large part on volunteers.
Mr Saunders, a former leader of Conservative-controlled Hertfordshire County Council, said yesterday: 'I will bring a corporate approach to the job, applying commercial controls. I will also be responsible for planning for the party's financial future.'
The Central Office budget, which Sir Norman has cut by 25 per cent to pounds 9m, is dwarfed by the sums Mr Saunders is used to dealing with. P&O's sales were pounds 4.9bn last year when profits were pounds 217m before tax. Fund raising remains the responsibility of Tim Smith MP, the treasurer.
Mr Saunders, 50, has been finance director of P&O, whose chairman, Lord Sterling, was adviser to Nicholas Ridley, when he was Secretary of State for Trade and Industry for two years, and has worked for group companies since the early 1970s.
He is being replaced by David Morris, of P&O's auditors, KPMG Peat Marwick. Mr Saunders said that until now he has had to treat politics as a hobby. Now he was combining professional and political interests.