Profile: Dripping wet and in a hurry: Stephen Dorrell, Major's own leadership candidate?

IT WAS an astonishing performance. In a headline-grabbing speech last weekend, Stephen Dorrell, number three at the Treasury, publicly rubbished the right-wing views of his immediate boss, Michael Portillo, who is carefully positioning himself as the Thatcherite contender in any forthcoming prime ministerial contest. Mr Dorrell's broadside, delivered to the wringing-wet Tory Reform Group, had the advance approval of the Prime Minister, who is rumoured to regard young Dorrell - and most emphatically not Portillo - as his natural successor.

Where Portillo had spoken, a week earlier, of national cynicism, disorder and the breakdown of social respect, Dorrell insisted that 'institutions have to earn legitimacy'. Where Portillo had chastised those who wanted a greater degree of European union, Dorrell lauded the EU to the skies and attacked 'the exaggerated histrionics of flag-waving nationalists' with their 'narrow, inward- looking view of patriotism'.

Dorrell dared to hymn the praises of the unfashionable Sixties, stressing creativity, individualism and respect for minority rights, and went on to argue for 'social freedom', which 'requires the individual to recognise a wide range of obligations to the members of society'. His concept is not one which would command instinctive support among those who retain Margaret Thatcher's distrust of the very concept of 'society' and who tend to equate Sixties-style individualism with self-indulgence.

Outside Westminster, Dorrell, MP for Loughborough since 1979, is not as well known for his fighting talk as his departmental superiors, Portillo and the Chancellor, Kenneth Clarke. But, as he proved at the Tory Reform Group meeting, he is not afraid to mix it with the heavyweights when he feels he has to.

In any case, a fresh face and a certain lack of arrogance and bombast are in order at the moment. Dorrell seems to have been bobbing up on television all week. He is less shrill and aggressive than some of his ministerial colleagues, and to many viewers his calmness and authority must make him a more convincing and attractive proposition than certain members of the Cabinet.

Among party activists Dorrell already has a reputation as a provocative and often very funny wet. This goes back to his time at Oxford in the early Seventies, when Edward Heath was Prime Minister. In those early days of undergraduate politicking Dorrell ran an outrageously left-wing pressure group. It was known - deliberately - as Pest (Progress for Economic and Social Toryism). This sort of thing was all very well while Ted Heath was Leader. Such posturing - and such friendship - in the Thatcher era could blight an aspiring young politician's career, as Dorrell learnt to his cost. But now Baroness Thatcher is gone, and Dorrell's luck has turned.

But what manner of man is this Stepehn Dorrell, whom the Prime Minister let loose to savage Michael Portillo? Peter Luff, an old chum of Dorrell's and MP for Worcester (since he succeeded Peter Walker in 1992), where Dorrell lives, says he comes from 'good, English yeoman stock. He is a typical provincial in the best possible sense of the word.'

Dorrell was born in 1952 into a local Worcester family whose prosperity is based on a privately owned industrial clothing firm established there in the 1830s. It has four factories in this country and two in the Netherlands. He went to Uppingham and then read law at Brasenose College, Oxford. He returned home in 1973 to run the business. By all accounts he worked grindingly hard, and his only relaxation - other than politics - was to fly a Tiger Moth in which he held a quarter share.

In 1980 he married Penelope Anne Wears, a classics graduate then running a children's clothing shop in Worcester. (They met at a party given by Walker. And, surprise, Luff had been a friend of Penelope's since childhood.) They have two children, a six-year-old daughter, Alexandra, and a baby son, Philip. A desire to economise and an unwillingness, as a family man, to endanger his life have led him to abandon the Tiger Moth.

But there was always more to Dorrell than worthy liberal-minded provincialism. He was politically ambitious. His parents had been prominent in the local Conservative Association and he was personal assistant to Peter Walker, then MP for Worcester, in the election of February 1974. Walker had been a big spending minister at Environment, and later at Trade and Industry, and was one of Heath's staunchest supporters. He was to become Dorrell's close friend and mentor and eventually his Parliamentary patron.

In October 1974 Dorrell won his spurs fighting Labour's John Prescott in the hopeless seat of Kingston-Upon- Hull East. By 1976 he was prospective Conservative candidate for Loughborough - a Labour marginal. He made a rapid and uncompromising mark on the constituency when he resigned from the local Conservative Club after a south Asian applicant was blackballed. He specifically disowned that section of the 1979 general election manifesto which pledged the party to cut immigration. He won the seat from Labour and entered the House, aged 27, as the youngest member.

A surprising number of young Tory members of the Class of '79 - including such luminaries as Chris Patten - were of centre-left inclination and rebellious with it. But Dorrell is remembered as the most consistent and uncompromising. Appropriately, he was a pest on two fronts, social and economic. He took part in a series of rebellions against the tougher immigration rules to which Margaret Thatcher was personally committed, and he regarded monetarism - another Thatcherite enthusiasm - with contempt.

The fact that the young whippersnapper stressed his experience as 'a practical Midlands businessman' when hammering the ideological excesses of government economic policy was particularly exasperating to the Prime Minister. She was said to have been 'absolutely furious' when Peter Walker picked his friend to be his Parliamentary Private Secretary in 1983. According to a colleague, 'It confirmed her worse doubts about the pair of them.' But her mood softened when she saw the cruel but effective undergraduate manner in which Dorrell organised some of his chums to hold up scorecards rating Neil Kinnock's performances in his early uncertain period as Labour leader.

When Walker left the Department of Energy in 1987, he was able to press Dorrell's suit successfully on the grounds that he was undoubtedly a wet but also a fighter of courage and integrity. Dorrell's surprising appointment as junior whip was part of the price Walker exacted for agreeing to stay in the Cabinet as Secretary of State for Wales instead of returning to the back benches to cause trouble. Dorrell rose through the ranks in the whips' office before becoming a junior health minister in 1990. He moved from health to his post in the Treasury after the last election.

Lord Walker still waxes lyrical about his protege. 'He was a superb PPS and made an outstanding intellectual contribution to my policies. He was not a disciple nor a creation of mine. It was I who benefited from his services.' Those who work to Dorrell at the Treasury are equally flattering about his intellectual grasp. One mandarin said: 'I don't think I have ever worked for a more intelligent minister.' Another noted that he conducts policy discussions as if they were Oxbridge seminars. 'He likes following the logic of ideas as an academic game and he can really clobber you if your arguments don't stack up. But, like a good academic, he is delighted if you can trip him up. Most ministers hate that.'

The important thing for Dorrell about the intellectual debate on the economy is how far it has moved on since the early Eighties, when he was out on a limb. Today nobody of significance is interested in defending what he once called 'simplistic, mechanistic monetarism'. And everybody agrees on the need for low inflation and a reasonable grip on the money supply.

The cutting edge of the debate is now privatisation and the introduction of market-testing mechanisms into those agencies which remain for the present in the public sector. Dorrell, as befits a pragmatic businessman from the Midlands, was always keen on privatisation and the disciplines of the market.

So it was a shrewd move on John Major's part to make Dorrell 'Mr Privatisation', a phrase he used privately when appointing him Financial Secretary to the Treasury. Dorrell's job would be to decide which Civil Service functions could best be sold off or contracted out, and how management could be improved in those which remained. And he was to preach the gospel to other departments that might not be willing to see their functions unceremoniously hived off.

Dorrell was delighted, in part because he believed in the cause, but also because it would enable him to mend fences with some on the right of his party. He has done so with skill. For example, Dr Madsen Pirie, director of the free-market Adam Smith Institute, works closely with Dorrell and speaks unexpectedly well of him. And one of Dorrell's most uncompromising right- wing ministerial colleagues says: 'We are on the same wavelength on the economic issues of the day. It's just his social policies I can't stomach.'

There's the rub - if, that is, Dorrell sees himself as a natural contender for John Major's job. On economic issues he is no longer a way-out liberal. But, as he confirmed to the Tory Reform Group, on Europe, on immigration and on social policy, he remains an unreconstructed Pest from the glory days of Heath and Walker. And that doesn't cut much ice among Conservative backbenchers these days.

But surely, at 41, Stephen Dorrell has little cause to worry? Time is on his side. He is at least a decade younger than all the other potential contenders for John Major's throne. Except of course for Michael Portillo, the baby of the Cabinet. Portillo is 14 months younger than his deputy and his ambition is unconcealed. No wonder Dorrell is a young man in a hurry.