Battle lines are drawn between Tory camps

When Iain Duncan Smith was busy trying to shore up his position at Prime Minister's questions in the Commons yesterday, just as many eyes were fixed on the figure who loomed darkly on the back benches.

Once the Tory leader had delivered his last question, and had been told by Tony Blair to watch for "grubby deals" around him, Michael Portillo decided to slip quietly out of the chamber. He carried with him Jeremy Paxman's new book, The Political Animal.

After Prime Minister's questions, Mr Duncan Smith invited backbenchers into his office for tea and biscuits and appeared to calm things down after his astonishing "unite or die" ultimatum on Tuesday. As some MPs declared a truce at the backbench 1922 Committee, it seemed the storm had passed. He hadn't been impressive, but he had done enough to survive, it seemed.

But then Kenneth Clarke popped up to launch a direct attack on Mr Duncan Smith's "briefing" and "self-induced" crisis. Mr Portillo repeated that he did not want to be leader, but said that the direction of the party "needs to be very clear and very consistent from one day to the next and from one shadow cabinet member to the next".

After Central Office seized on the new evidence of disloyalty, claiming that "this proves there are people who will not support the leader", it was clear the crisis had not gone away at all. Worse still, two "grubby deals" were the focus of intense speculation, one linking Mr Portillo with Mr Clarke, the other David Davis with Michael Howard.

The increasing closeness between the Clarke and Portillo camps was crystallised at last month's party conference in Bournemouth, when their respective supporters joined forces at a fringe meeting.

Conservative Mainstream, the broadly left of centre grouping, and C-Change, a new think-tank for modernisers, hosted a packed event at which the former minister Steven Norris called on his party to unite around "equality of esteem" for all sections of society.

The last time there was an attempted alliance between Clarke and Portillo supporters, things didn't exactly go exactly smoothly. A rumoured pact collapsed as Mr Clarke refused to trim his euro views. Two Clarkites, Stephen Dorrell and Damian Green, could play a key role in any new deal.

In recent days, as Mr Duncan Smith rounded on his critics, the Portillo camp has been inching ever closer to planning a formal alliance with Mr Clarke's supporters.

For the right of the party, disenchantment with Mr Duncan Smith has also been growing. Although many are pleased at the Thatcherite policies announced at the party conference, the way the leader handled the recent discontent has dismayed them.

David Davis, who was furious at his sacking as party chairman in the summer, together with the Central Office briefings against him that triggered it, is understood to be reluctant to stand this time.

Michael Howard, the shadow Chancellor, is being tipped to emerge as the heavyweight figure the right needs, fulfilling an ambition that may have been rekindled since his return to the front bench. If he runs, he would be bound to pick up support from figures such as Liam Fox, the shadow Health Secretary and himself a possible leadership contender, and from John Whittingdale, the shadow Culture Secretary. But the backing of Mr Davis, who would then position himself as the heir apparent, would bring powerful shadow cabinet support from Eric Forth, the shadow Leader of the Commons, as well as a fresh image. When this week's crisis broke, Mr Howard was in Singapore.

Mr Davis was kept out of the loop on Tuesday morning and informed at the very last minute that his joint event with Mr Duncan Smith was cancelled. Mr Howard's critics, many of them Portillistas, believe his public image is so poor he would be the worst option.

But it may be all in vain, one former senior figure said last night. Lord Cranborne, a former Tory leader in the Lords, was scathing about the Tory leadership and other MPs. "They look increasingly like the last days of the Roman Empire, with six or seven dwarves fighting for the imperial purple. Once one of them has got what remains of the purple, a rag, there will be no empire to run," he told Channel 4 News.