Cameron's threat on Royal Mail vote adds to Brown's woes

Tory leader warns of no-confidence move as expenses row pushes Labour to record poll low

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Gordon Brown's mounting difficulties over cabinet disloyalty and expenses deepened last night as David Cameron warned that he is ready to join Labour rebels and defeat the Government over part-privatisation of the Royal Mail.

In an interview with The Independent on Sunday, the Tory leader says he will back the legislation only if it is not watered down with concessions to buy off Labour backbenchers.

With the Prime Minister certain to offer Labour rebels a deal, this means that Mr Cameron is likely to abandon support for Mr Brown. The Tory leader also holds out the threat that, in the event of a government defeat, his party will mount a potentially deadly confidence vote against the PM.

The threat came as the expenses scandal continued to batter the Government, with Labour MPs braced for further revelations last night.

There was alarm within Downing Street that The Daily Telegraph, which has copies of the expense claims of all 646 MPs, has so far failed to target Mr Cameron's shadow Cabinet.

It also emerged that dozens of MPs, including the Secretary of State for Communities, Hazel Blears, have benefited from loopholes that allow MPs to avoid paying capital gains tax on second homes if the homes are classified as their main residence, or if they sell within three years of having lived there.

In a further sign that the expenses furore threatened to paralyse the Government, a new opinion poll suggested Labour's popularity had slumped to its lowest level since polling began, amid a series of scandals and renewed speculation over Mr Brown's leadership.

A BPIX survey for The Mail on Sunday found the party's support had dropped three points over the past month to just 23 per cent – even lower than when Michael Foot was at the helm in the 1980s – and 22 points behind the Tories. The dire position was reinforced by a separate YouGov poll for The Sunday Times, which suggested Labour's support had tumbled by 7 points to 27 per cent – 16 points behind the Conservatives.

Amid fears that Labour was bearing the brunt of the expenses disclosure, Alastair Campbell, Tony Blair's former spin doctor, called for all MPs' expenses to be published immediately.

In a bizarre twist last night, the disgraced former Tory MP Derek Conway, who was twice reprimanded over the "misuse" of public money to employ his sons, warned that many more politicians were guilty of expense abuses. The MP for Old Bexley & Sidcup, speaking to the IoS, called on parliamentary authorities to investigate the cases that have emerged so far – although he predicted that no ministers would resign.

Mr Conway said: "With more than 200 MPs employing family members and many more employing lovers and in-laws, [Harriet] Harman and her gang are well aware of the troubles lurking where the press have only scratched the surface."

Mr Conway was forced to reimburse almost £17,000 of taxpayers' money paid to his two sons. He was also expelled from the Conservative Party. He added: "My crime was in not applying a rule that has never existed and for that I paid a very heavy price, politically and personally, but I would not bet on a single Labour MP or minister following suit. It's not the way they work and they will hang on in the face of all criticism.

"It will be interesting to watch how the Parliamentary Commissioner and the Standards and Privileges Committee handle investigations. All I seek is that the process is consistent and comparable with that forced upon me."

Downing Street sources said it could not order the publication of all MPs' expenses as it was a matter for the House of Commons. In more grim news for Mr Brown, Mr Cameron stopped short of offering a cast-iron guarantee that his party will back the Government in the Royal Mail vote. Up to 120 Labour MPs are threatening to rebel next month, forcing the Prime Minister to rely on Tory votes. The strength of the revolt means it is likely Mr Brown will allow his chief whip, Nick Brown – who has common cause with rebels – to offer a series of compromises. This could lead Mr Cameron to withdraw support and pave the way for a confidence vote in the Commons. Even if Mr Brown won, it would be the first such motion against a Prime Minister since John Major in July 1993. Mr Major won, but his premiership was destabilised.

Mr Cameron told the IoS: "As long as the Government doesn't do something crazy and change its mind and do a U-turn, we support part-privatisation of the Post Office... So as long as they don't suddenly change their plans, and as long as they answer reasonable questions about the structures of what they are putting in place, and as long as they are reasonable about how much time the House of Commons has to debate and discuss this."

Suggesting that the Tories might trigger a confidence vote if Mr Brown were defeated, he added: "You are not going to bring the Government down over this, you are going to bring the Government down if there's an issue of confidence."