Jittery Tories play down talk of rift after Osborne criticises party 'modernisers'

Rumours of growing division in the senior ranks of the Conservative Party increased last night as George Osborne was accused of distancing himself from David Cameron and the modernisers in the party. Mr Osborne, the shadow Chancellor is a close friend of the Tory leader and has been a leading architect of the modernisation of the Tory Party in an attempt to widen its appeal.

However, the strain of a growing Labour lead and the threat of an early election has begun to show. In an eve-of-conference interview with The Spectator, Mr Osborne said: "I don't take the kind of über-modernising view that some have had, that you can't talk about crime or immigration or lower taxes."

One former Tory shadow minister said: "We are falling apart under the strain." Also, Lord Tebbit launched a fresh attack on Mr Cameron's style of leadership last night, saying on BBC television: "He stands there with no tie on because he thinks that is what ordinary people do. But he is missing the point that leaders don't have to look like the people they are leading. The Prime Minister doesn't have to look like the guy next door."

Allies of the shadow Chancellor dismissed the reports of a split with Mr Cameron and said he had been directing his fire at Michael Portillo and arch-modernisers who have warned against a lurch to the right.

"It's total bollocks," said one of Mr Osborne's friends. "The closeness between Cameron and Osborne is absolutely key to any political success. We've watched the Brown-Blair splits and that was a disaster. We are not going to let that happen."

Mr Osborne's remarks are seen by Tory traditionalists as a move by the Tory leadership to provide the room to appease the right- wing. Mr Osborne made it clear he wanted to "balance" the message from the Tory conference in Blackpool next week between tax cuts and the need to preserve economic stability, and protect public spending on health and education.

However, some in the Tory high command are showing signs of panic over rumours of another high-profile defection this weekend to Labour to wreck their conference.

Yesterday, at Labour's conference, Mr Brown issued a direct appeal to disaffected Tories and Liberal Democrats to join Labour. He said: "I will continue with the policy of reaching out to those people who share our views, who believe in a society built by working hard, playing by the rules, fair play."

Mr Cameron tried to calm Tory nerves at a private meeting of his MPs at Westminster for a morale-boosting speech before the Tory conference. Tory sources said the meeting had been long arranged, and it was not a "knee-jerk reaction" to the latest opinion polls showing Labour has opened up an 11-point lead over the Tories.