Clarke spurns Portillo's 'dream ticket' advances

Internal links

Leading article: The Conservatives could find that their defeat was not an unmitigated disaster

Ashdown warns Kennedy over strategy

Shake-up gives Blair tight grip on Government

Our analysis of the Government departments

Brown 'isolated' over early euro referendum

Vaz ignores new inquiry requests

Murdoch drops in on friends at Number 10

Getty donates £5m to Tory war-chest

Hopes of a "dream ticket" of Michael Portillo and Kenneth Clarke for the Tory party leadership were on the brink of collapse last night because Mr Clarke wants the freedom to call for an early referendum on joining the euro.

Mr Portillo will end speculation about his intentions today and announce his candidacy for the leadership in an attempt to steal a march on possible rivals. In what will be the first stage of his campaign, the shadow Chancellor will simply make a short "statement of intent" and refrain from listing all of his supporters. Mr Portillo is keen to build a broad coalition of "one-nation" Conservatives and more right-wing colleagues and had hoped that Mr Clarke could be persuaded to come on board.

But supporters of Mr Clarke, a former chancellor, made clear last night that attempts to encourage the two men to join forces had made no real progress and hinted that it was more likely that he would stand in his own right. Mr Clarke is understood to have insisted that he be allowed the right to call for an early referendum on the euro.

The former chancellor also wants the Conservatives to tone down their rhetoric on the European Union and believes arguing for renegotiation of the Nice Treaty to be "unacceptable". He also wanted more time to work out any possible deal with the Portillo camp and his supporters feel he resents being "bounced" by an early declaration by Mr Portillo.

A source in the Portillo camp indicated that a so-called pact was far from settled. "Ken wants one or two weeks to make up his mind. Michael's mind has been made up. We are getting support from across the party. If Ken doesn't want to be part of that, it's up to him."

Ian Taylor, MP for Esher and Walton, revealed yesterday that Mr Clarke had been having "conversations" with others about his leadership ambitions.

Mr Taylor, a leading supporter of the former minister, warned that unless the Tory party changed not just its leader but its direction on policy, it risked becoming the third party in British politics. But while some Portillo supporters were prepared to allow him to campaign for a "yes" vote on the euro, actively calling for a poll would be a step too far.

Mr Portillo is keen not to alienate many on the right of the party who could possibly support Iain Duncan Smith, the shadow Secretary of State for Defence, in a future contest.

Mr Portillo held a party yesterday for his local Conservative Association at his home in Kensington. But he was in constant touch with his embryonic campaign team of Francis Maude, the shadow Foreign Secretary, and Robbie Gibb, a former aide who left Conservative Central Office during the Hague years.

High-ranking Portillo supporters already include the shadow ministers David Willetts, Tim Yeo and Archie Norman, and the campaign team hopes it can gain a healthy majority of frontbenchers.

Peter Lilley, the former Tory deputy leader ousted by William Hague and another potential Portillo supporter, launched a scathing attack yesterday on his party's strategy in the election. In a veiled reference to Ann Widdecombe's plans to detain all asylum-seekers, he said Conservative policy had been "more about locking people up than setting people free".

Members of the Portillo camp believe that if they can secure the backing of one-nation Tories such as Stephen Dorrell and Damien Green, they will not need Mr Clarke, the greatest Europhile of all.

The bookmaker William Hill slashed odds on Mr Portillo securing the leadership to 1/3. A spokesman said they had taken a string of four-figure bets on the shadow Chancellor. Mr Duncan Smith is second favourite at 4/1, Mr Clarke 5/1 and Ms Widdecombe 7/1.