Mightier than the sword

He holds no government position or party office. He's no longer even a Tory. But Lord McAlpine's book is spreading fear in Westminster. By Donald Macintyre

He is talking from the safety of his quiet, beautiful Venice home - described as a palazzo by his ideological arch-opponent Michael Heseltine and by the man himself as a "modest little house" on a "backwater at the Tower Hamlets end of the Grand Canal".

Lord McAlpine, Margaret Thatcher's most successful political fundraiser, complains that much of his explosive new book, to be published this month, doesn't even deal with politics at all. He writes about other areas of his life - as anthropologist, as the foremost patron of British sculpture in the 1960s and 1970s, as Australophile and expert on Aboriginal art, as benefactor of the Tate, as collector, connoisseur, writer, Garrick Club wit and super-wealthy toff.

But it's the politics that matter this week and it's something John Major could do without. Lord McAlpine idolised Margaret Thatcher and was party treasurer and one of her inner circle for 15 years. He has an eye for the wicked anecdote, whether it is Chris Patten greedily gobbling his oysters or Thatcher enjoying the deliciously "Gilbertian" spectacle of Norman Lamont with a black eye after a brawl with a former boy-friend of the "extremely attractive" widow Olga Palizzi, or his own warning to John Major that John Gummer "was not the sort of person you would risk going for a walk with in St James's Park, let alone the jungle".

It's a spectacular understatement to say he doesn't think much of Mr Major as a leader. He has freed himself from any obligations of loyalty to Conservatism by joining the Referendum Party, his old friend Sir James' Goldsmith's great electoral adventure. His book would probably have caused the minimum of fuss if only the election had been called last autumn. As it is, every word of its newspaper serialisation is being lapped up by the Jacobite tendency in the Tory Party - those who have never stopped wishing She was Still in Charge. For he can say, lamenting the departure of his heroine, what others dare not: that "only a considerable defeat" will clear the heads of their party.

McAlpine believes that the Tories should be anti-single currency and in favour of renegotiating Britain's relationship with Europe. He argues that Major's leadership has damaged the party "beyond imagination". Nevertheless, he maintains that he would be "surprised" if the Conservative Party split in two after the election. "Great parties don't split," he says. The Conservatives, he insists, will heal in time (though he constantly proclaims "I'm not a member of the Conservative Party - I don't take the Conservative whip so it's not my problem.")

Noting that leadership campaigns are already under way, he says he finds none of the front-line challengers "very palatable." And speaking of some senior members of the Tory party, he is very rude indeed. Brian Mawhinney, the party chairman, who he describes in his book as "having all the joy about him of an undertaker's mute" is definitely "not my sort of chap".

He is "not excited" by either John Redwood or Michael Howard, adding that he "wouldn't have Michael Howard as leader". What about Stephen Dorrell, repositioning himself, with mixed results, on the right of the party over Europe? "He changes every five minutes. I'd like to hear Dorrell talking about the health service for a change. I think he's going to be immaterial. I don't think he's going to be in the race - he doesn't look up to it... not a safe pair of hands."

McAlpine says Heseltine's palazzo jibe - in a passage of his party conference speech last year savaging the Referendum Party - was "pretty ungenerous considering there have been a few occasions when I've helped Michael Heseltine". Lord McAlpine's wife, Romilly, helped to look after Heseltine in Venice after his heart attack.

"If the Conservative party is going to be against apparently wealthy people who have houses in Europe, then for God's sake... I mean why is it that Tories who are hell-bent on taking us into Europe are so against people who actually live there?"

Surprisingly, despite their differences on the kind of Europe they would like to see, McAlpine is rather nice about Ken Clarke, the Chancellor of the Exchequer. He admired Thatcher for being a tough, combative politician and adds: "I like Ken Clarke and that's a subject on which I could wax quite lyrically at the appropriate time. Ken Clarke has many of the qualities which I admire."

His book is full of mischievous portraits of key figures in the first two years of John Major's "Cabinet of Chums": like Norman Lamont, whose stubborn refusal to recognise the looming signs of recession was one of the main reasons his links with the Tory hierarchy were finally fractured. The recession, in stark contrast to Lamont himself, was anything but "short and shallow".

And was it true that cheers had echoed from the election night party at his house in 1992 when Chris Patten lost his seat at Bath? Well, says McAlpine, there were two parties going on. One was upstairs where Mrs Thatcher and a very select group of chums were watching the results, and another downstairs, where there was a much louder, larger group. There may have been cheers from downstairs but there were certainly none from Mrs Thatcher. And what about him? "I don't recall, but I wasn't sad to see him go."

This brings us to Major himself. When Major used to hang about Chequers "pretending to be the curtains", as he witheringly puts it, McAlpine devised an explanation, he says, for all those people who would say to him they'd just met Major and ask "why on earth" Thatcher kept saying he would be her successor. "I used to tell people that it was a scheme to humiliate Geoffrey Howe" (then deputy Prime Minister). He makes no bones about being suspicious of the wisdom tooth problem which Major contracted when the moment had come for him to sign Thatcher's second ballot nomination papers. And he adds: "I ask you a question: has his leadership been a triumph? I think it's self evident that the Conservative party has been shattered beyond imagination. It's not irreparable. Conservatives always heal but it will take time."

On the single currency, McAlpine is contemptuous of the "wait and see" approach. He favours outright opposition. But a clear line in favour of EMU even if it drove many from the party would at least mean "we would know where the hell we are all going". And he denies that Goldsmith's goal of a referendum vote in favour of a renegotiated relationship with Europe, rolling back the Maastricht Treaty, is hopelessly unrealistic or that the rest of the EU in those circumstances would simply "tell Britain to get stuffed".

"Our trade deficit with Europe is something like pounds 90 billion over the last 10 years. Now if I had a customer who was taking that kind of stuff from me, I'd take quite an interest in what he was saying. The last thing I would do is ban him from the shop. I don't think I would say 'get stuffed'. I think a lot of other countries are waiting for a lead."

Major had first come to notice because he settled a public spending round as Treasury Chief Secretary without recourse to the "Star Chamber". "He's a very good negotiator but I think good negotiators don't make good prime ministers because being prime minister isn't about negotiation - it's about leadership."

This makes his assessment of Tony Blair all the more wounding. First he implies that it's too early to judge Blair, saying: "You can only really tell whether someone's a leader when they have to demonstrate it," but then he adds "in terms of sorting out the Labour Party, he has certainly demonstrated leadership."

What has made news, of course, is the revelation that John Major got personally involved in asking Lord McAlpine's help to solicit a pounds 500,000 donation from the Greek shipowner John Latsis. In fact, says McAlpine, he told the story to illustrate that he himself hadn't just been "a malcontent Thatcherite" and had been willing to help after Major came to power. News of the donation subsequently leaked. "It caused me a lot of aggravation at the time. The chap was furious and also I had a reputation for not landing people in it."

Latsis aside, even the biggest donations had been in the pounds 5,000 to pounds 15,000 range. and those he believed should be secret. Even "if a rich man wanted to give you 50 grand, it was hard to criticise. I mean he clearly wasn't looking for oil concessions or something. "But now it was different. There was talk of the Tories having a pounds 40m war chest. There had been one recently publicised donation of pounds 5m. "If you ask me if I think that sums of pounds 10,000 or pounds 15,000 or pounds 20,000 should be private, the answer's yes. If you ask me whether a sum of pounds 5m should be private, the answer is definitely no."

So isn't it, finally, just a case of bitterness, of not ever having forgiven the party for letting Thatcher go? Well, he says, he has always been a realist, and all his criticisms of what happened since then has been based on actual performance. I retired six months before she went I was very happy to be an outsider again. I was very happy to be away from politics... It was a great relief to get on with normal life. I was upset when Margaret Thatcher went. I was desolate but you get over things."

Why had friends of hers such as him joined a rival party while she had stayed loyal, at least in public? Thatcher, he says, she had been a child of the Conservative Party. Her father had been a councillor, and she had come up through its ranks. Its activists had always helped her. For him, it hadn't been like that. He had been asked "out of the blue" personally by her to do a job, and he had done it, becoming a "significant fund raiser" - and then he had left. So, was he really saying that unlike her he didn't really owe the Conservative Party anything? "I wouldn't say that because it's quite a rude thing to say." But then he adds: "When you boil it down, it's pretty near the truth."