Why Redwood unbound will put Portillo to the test carefully while Redwood is free, the mantle is not easy

EVEN before Baroness Thatcher's return to the fray last week, one of Michael Portillo's "friends" had let the cat out of the bag. After Mr Portillo had used a radio interview from Japan to claim that Tory left-wingers were plotting against him, his "friend" helpfully informed journalists that the aim of the left was "to stop Michael ever becoming the leader after the election".

After the election. If any naive spirits on the Conservative backbenches still believed that the pressing battle of the moment was to save their seats at the next election, here was proof to the contrary. What Mr Portillo, his supporters and critics - and indeed Lady Thatcher - are up to is fighting over the succession to John Major.

It is no surprise that the Portillo camp displayed its hand with such a lack of finesse. The Secretary of State for Defence may possess charisma and charm to a degree few can rival, but to be a fully paid-up "friend" of his still seems to require uncritical devotion to the cause of his leadership, a set of self-reinforcing instincts and a touch of sycophancy. These supporters are enormously loyal - Robert Key (once an ally of Chris Patten), actually wrote to the Prime Minister last week to complain about anti-Portillo plots. It is a testament to Mr Portillo's political weight, given the company he keeps, that he remains the right's leading candidate.

But Mr Portillo is poorly advised. The ring-master at the Portillo circus is David Hart, the man who played a cloak-and-dagger role in the battle to break the miners' strike of the 1980s. He and his ilk have certainly not effected a smooth upward drift in their mentor's fortunes. Two years ago Mr Portillo was seen as the great intellectual hope of the right. Then he made speeches damning the creeping "disease" of cynicism, and claiming that foreign students bought their degrees. He was thought of as the scourge of government profligacy but, as Chief Secretary to the Treasury, failed to slay the public-spending dragon. His reputation as a man of guts and political loyalty took a knock when he funked the challenge to contest the leadership last June - but still allowed his allies to install phone lines in a house at Westminster which was to act as his base for a predicted second ballot.

It became something of an embarrassment for him last year to be the champion of the Conservative Way Forward group, whose Thatcherist devotion often proved excessively ardent. A generally sympathetic biography by Michael Gove contained a section about student social life in Peterhouse College, Cambridge, to which the tabloid press will undoubtedly return should a Portillo leadership start to look likely.

While Mr Portillo has been cocking things up, John Redwood has pursued the position of right-wing heir-apparent with thoroughness if not panache. Having come from nowhere, Mr Redwood is now a threat to Mr Portillo. He dared to resign and fight Mr Major last year, winning a bigger personal vote than expected. True, his "Vulcan" image still dogs him, but Mr Redwood's public-recognition factor has risen (in other words, people know who he is, which is the first requisite of political success). Unexpectedly, he gave as good as he got against a TV interviewer infinitely more dangerous to Tory MPs than Jeremy Paxman - Clive Anderson.

Free of the burdens of office, Mr Redwood travels the country on a Heseltine- style tour of constituency associations, mixed in with meetings designed to turn businessmen against a single European currency. He will pop up at the end of this month with the publication of a set of his speeches and plans a series of set-piece speeches including one on health and education.

With these two combatants on the right squaring up, Lady Thatcher's words were eagerly awaited. Her speech followed a period of silence on domestic issues. This came about more by accident than design: not only has she a very busy and lucrative international speaking schedule, but Lady Thatcher had been laid low by some particularly unpleasant dental work.

Her message, when it came, was a rallying cry to the right. Rejecting One Nation Conservatism, which Mr Major endorsed only recently, Lady Thatcher presented a vision of a Tory future based on the "basic Conservative principles which prevailed in the 1980s". Both Mr Portillo and Mr Redwood were mentioned by name, as were two other right-wingers, Peter Lilley and Michael Howard. Thus both potential successors were praised, but neither was anointed.

What of the pro-Europeans? It took the defection of two of their number and the unrelenting provocations of the sceptics, but there are finally signs that they are stirring. Individual MPs have written to Mr Major urging him to resist the sceptics' demand for a White Paper spelling out the Government's negotiating position in advance of this year's European Inter-Governmental Conference on the Maastricht process. They feel he should not tie his hands, and they seem to have won that battle. Even bolder, the leftish Macleod Group expects to publish an essay by Quentin Davies, MP for Stamford and Spalding, arguing for more qualified majority voting, backing economic and monetary union, and supporting a common security and defence policy.

Meanwhile the pro-Europeans are being increasingly won over to the cause of a referendum, convinced that a direct appeal to the people, which they believe they can win, is the only way of stopping the advance of the sceptics in the Tory party.

With the conference beginning at the end of March, and with a growing preoccupation in the markets with a single currency, the possibility of another row over Europe within the party before the election seems ever greater. Mr Redwood plans to take the initiative, probably publishing his own proposals for the conference. Mr Portillo has to be more cautious. He has more to lose.

Mr Portillo calculates that he needs the support of about one-third of the current Parliamentary party. Given that many of those retiring are left-wingers, and that the new intake should be more right-wing, majority support in the new intake of Conservative MPs should be his. But he cannot afford to be blamed for election defeat. Later this month he will seek to recoup some Brownie points as a loyalist with a speech attacking Labour. But as the year progresses Mr Portillo's judgement will be on test as Mr Redwood takes advantage of his freedom to speak out. Because of the delicacy of all this, Mr Portillo's allies are urging him to transform his circle of intimates rather as Michael Heseltine did as soon as he got back into government and into contention for the biggest job.

And the Portillo nightmare? A surprise Tory election victory which leaves his future and the timing of the leadership succession in the hands of Mr Major - the man who labelled him a bastard. Of course no one in the Conservative Party is talking about that.

Alan Watkins is on holiday