Letwin set to quit as shadow chancellor

Oliver Letwin today became the latest senior Conservative to step down from Michael Howard's frontbench team.

Allies of Mr Letwin say he is planning to quit as shadow chancellor to pursue his interests in the City.

Mr Letwin was forced to give up a £300,000-a-year contract with Rothschild when he took up the Treasury post.

He is understood to want a different shadow cabinet post where there would not be any potential conflict with his business interests.

Two other senior Tories, Tim Yeo and Nicholas Soames, have already announced they will be leaving the shadow cabinet.

The splintering of the frontbench team has forced Mr Howard into an earlierthanexpected reshuffle. The changes, expected to be announced tomorrow, are expected to see prominent roles for potential leadership contenders.

Sir Malcolm Rifkind, the former foreign secretary, is tipped to take over from Nicholas Soames at defence, while David Cameron, regarded as Mr Howard's heir apparent, is expected to be given a highprofile portfolio such as education.

Mr Howard is also under pressure to set out a clear timetable for his departure-Donors to the party and senior colleagues are urging him to stay in place until Christmas at least, to avoid a prolonged and divisive leadership contest.

Meanwhile, Tory moderniser John Bercow launched a stinging attack on Mr Howard's general election campaign tactics. The former shadow cabinet minister said the party had fought the election on an "embarrassingly thin" manifesto that offered "neither a vision of Britain nor a programme for government".

The decision to brand Tony Blair a liar had been "extraordinarily unwise", Mr Bercow said. "It made us look nasty and played straight into Charles Kennedy's hands. It beggars belief that anyone could think vulgar personal abuse of Tony Blair would make people vote Tory," he says in an article for the Independent.

The Conservatives had focused too heavily on immigration even though it was not a priority for voters. "Repeatedly highlighting the issue seemed at best obsessive and at worst repellent," he said.

He called for "root and branch" reform to move the party to the centre ground.