Portillo to run if Major ousted

PM bids to upstage Redwood's policies

DONALD MACINTYRE

and COLIN BROWN

John Major's leadership battle against the Tory right was facing the prospect of a second front last night after the first confirmation that Michael Portillo would run in a second ballot and threats of further Cabinet resignations unless Mr Major crushes the challenge of John Redwood.

As John Major's Cabinet turned the heat on Mr Redwood's policy programme, Mr Portillo's supporters went out of their way yesterday to emphasise his readiness to throw his hat into the ring after voting for Mr Major in the first ballot.

The move came amid clear signs that Mr Major cannot expect united Cabinet backing for the stance pushed by his campaigners that he will continue to soldier on however narrow the margin by which he defeats Mr Redwood.

Ministers are reliably said to be ready to urge Mr Major to resign if the former Welsh Secretary secures enough votes and abstentions - perhaps 100 plus - to inflict serious damage to Mr Major's authority without actually forcing a second ballot.

The fresh moves came as it was revealed last night that Mr Major and Mr Redwood are to join battle for the right-wing of their party by both appearing at eve of poll hustings, next Monday, run by the 92 group of MPs.

The developments followed a day in which the Conservative Party's free fall was compounded by fresh turbulence in the foreign-exchange markets, ever wilder resignation rumours, and frantic intrigues between MPs supporting Mr Major's leadership rivals.

Forced to mount a counter-attack from the EU summit in Cannes against the launch of Mr Redwood's manifesto, Mr Major last night foreshadowed a cluster of new and nearly-new policies, to seize the initiative.

Mr Redwood unveiled a populist programme aimed at restoring the faith of core Tory supporters, including opposition to the single currency, tax cuts, a boost to law and order, and preservation of the Royal Yacht.

But Mr Major, in an article in the London Evening Standard, outlined plans to slash inheritance and capital gains tax, introduce two-pilot "boot camps" for young offenders, tax help for those insuring for care in their old age, and new green field, grant-maintained schools to increase parent choice.

Although some Major allies argued that Mr Redwood had merely recycled plans already under consideration in the Cabinet, Kenneth Clarke, the Chancellor, appeared to rule himself out of any putative Redwood Cabinet by describing him - in reference to the US Congressional leader, Newt Gingrich - as a "pale echo of some leading American Republican figure".

Mr Portillo's potential candidacy was underlined when John Whittingdale, one of the Secretary of State for Employment's inner circle, said that he hoped Mr Major would win the election: "But if the Prime Minister did come to stand down, whenever that may be, then Michael Portillo will become a candidate for the leadership."

However, members of both teams argued that the presence of two right- wing candidates would maximise the chances of combating the threat from Michael Heseltine. A third ballot would then be a run-off between Mr Heseltine and whichever right-winger recorded the better vote.

Mr Major stressed his confidence in victory by nominally clearing the way for other members of the Cabinet to stand against him, denying that he had imposed a loyalty pledge. "I have asked no one not to stand. At no stage have I said to any member of my Cabinet, any member of my party, or any member of my Government you cannot stand in this election," he said.

Britain's EU partners responded to the leadership threat to Mr Major by allowing the Prime Minister to leave Cannes last night with two successes, in blocking progress on an extension of powers to Britain for the European Court of Justice, and detailed French proposals for the single European currency.

Mr Major also secured progress on the Northern Ireland peace process in talks with John Bruton, the Irish Prime Minister, in drawing up detailed plans for the IRA to decommission arms, which could allow Sinn Fein into substantive talks for the first time.