PORTILLO BACKTRACKS AFTER RIVAL'S STRONG SHOWING

Shadow Chancellor Attempts To Cast Off Liberal Image And Redesign Campaign

Michael Portillo yesterday watered down his liberal views on drugs and gay
rights in an attempt to woo Tory MPs after his poor performance in the
first round of the leadership contest.

On the eve of the re-run of Tuesday's vote, the shadow chancellor claimed
his call for a debate on legalisation of cannabis and a review of Tory
support for section 28 formed no part of his campaign.

"I have not raised these issues," Mr Portillo told BBC Radio 4's Today
programme. "These issues are not part of my campaign." Portillo supporters,
who are unsettled after he polled only 49 votes on Tuesday, said that the
shadow chancellor was recalibrating his campaign in the light of a backlash
among Tory MPs at his remarks on drugs and section 28.

They admitted that Mr Portillo had raised the contentious issues, but had
only done so under questioning.

Tories on the right were dismayed when Mr Portillo told MPs on Monday that
he would review the party's support for section 28. The following day Mr
Portillo appeared to suggest the time had come for the legalisation of
cannabis.

Mr Portillo's seeming u-turn came after the Tory leadership contest was
thrown wide open on Tuesday when the shadow chancellor failed to secure a
decisive lead. Iain Duncan Smith, main candidate of the right, surprised
all wings of the party when he came second with 39 votes.

The Thatcher favourite was closely followed by the former chancellor,
Kenneth Clarke, on 36 votes. David Davis and Michael Ancram tied in last
place on 21 votes, forcing a rerun today.

Mr Duncan Smith is now regarded as such a threat that the former prime
minister John Major is said to have intervened to warn MPs that they should
not vote for the man who led a series of Eurosceptic rebellions during his
premiership in the mid-1990s.

Mr Major believes that Mr Duncan Smith would fail to take the Tories back
to the centre ground where elections are won.

The Portillo camp are confident they will stay ahead of Mr Duncan Smith,
despite signs that supporters of the shadow chancellor may defect. But
Portillo supporters have been jolted by their rival's strong showing, which
is likely to deprive the shadow chancellor of the decisive lead he needs if
he is to win round wavering party members in the final round.

Despite the attention on Mr Duncan Smith, supporters of Mr Clarke are
hoping that their man will pull ahead in today's ballot. They are pinning
their hopes on supporters of Mr Ancram, the "unity" candidate, transferring
their support to the One Nation former chancellor.

But Clarke supporters were preparing the ground if he fails to come second
- - the result he must achieve if his name is go before 300,000 party members
who have the final say.

Two former cabinet ministers said that Sir Michael Spicer, the chairman of
the backbench 1922 committee who is running the parliamentary contest,
should allow three candidates to go before the membership if there are only
a few votes separating Mr Duncan Smith and Mr Clarke

Lord Howe of Aberavon, the pro-European former chancellor, warned that the
Conservative party would face "substantial defections" if Mr Clarke's name
was kept off the final ballot paper. His remarks were echoed by the former
home secretary, Lord Brittan.