Tory MPs plot to replace Liz Truss with Rishi Sunak or Penny Mordaunt

Conservative MPs are already plotting to replace Liz Truss as party leader on account of her disastrous first month in office, a senior Tory has said.

Paul Goodman, the editor of the influential ConservativeHome website, said Rishi Sunak and Penny Mordaunt were among MPs being tapped as possible replacements for the prime minister.

It comes after Ms Truss's first budget in office saw the pound tank and interest rates on government and mortgage debt surge.

A slate of unfunded tax cuts, mainly for higher earners, unleashed chaos on the financial markets and has seen the Tory poll rating tank to record lows.

A poll released on Wednesday of Tory heartland seats in the south of England saw Labour capturing swathes of the party's safe 'blue wall' seats, while national polls but Ms Truss's party twenty to thirty points behind the opposition.

"All sorts of different people are talking about all sorts of different things because the Conservative backbenchers are casting around for a possible replacement for Kwasi Kwarteng, even for a possible replacement for Liz Truss," said Mr Goodman, a former Tory MP himself.

"All sorts of names are being thrown about, Rishi Sunak, even Boris Johnson, Kit Malthouse, Sajid Javid.

"But one idea doing the rounds is that Penny Mordaunt and Rishi Sunak, who, after all, between them got pretty much two-thirds of the votes of MPs, come to some kind of arrangement and essentially take over."

Ms Mordaunt and Mr Sunak both ran again Ms Truss in the Tory leadership contest, which the prime minister won just a month ago.

Mr Sunak in particular used the contest to warned that Ms Truss's economic policy – which is based on ideas promoted by right-wing think-tanks – would lead to economic disaster.

Asked if any bid to replace the current Tory leader would be decided without the party members, Mr Goodman said: "Yes, I suppose the arrangement would be to come to an agreement about one candidate so the members are a cut-out.

"I have to say I'm not very enthusiastic about this kind of idea myself, nor am I enthusiastic about the prospects of the Conservative Party junking what would be its fourth leader in seven years."

Existing Conservative rules are thought to protect Ms Truss from direct challenge by MPs for a year from her election – but it is understood that these could be changed if the right authorities in the party were brought on board.

Yet such an attempt to replace her without a vote of the membership could be derailed by any other MPs choosing to stand in the leadership contest.

At a meeting of the party's 1922 committee last night fractious Tory MPs pushed for more U-turns on prime minister's budget, in what was described as a "robust exchange of views".

MPs pushed Ms Truss to reverse her decision to hold down corporation tax, a measure which cost the Treasury £18.7bn and is expected to leave a black hole in the public finances.

But the prime minister reportedly doubled down on her tax cuts at a £1,500-a-ticket Tory fundraising dinner on Wednesday night, the Daily Telegraph reports.

Speaking on BBC Radio 4 James Cleverly, the foreign secretary, defended the prime minister and said ditching Ms Truss now “would be a disastrously bad idea not just politically but economically".