Speculation blamed on Heseltine supporters

Thatcher says she is happy to stay on

Supporters of Mr Michael Heseltine were yesterday blamed for speculation about the Prime Minister's position as she declared her personal commitment to leading the Conservative Party into the next general election.

Mrs Thatcher moved to quash reports that she might stand down by saying that she was “very happy” in her present job - and had every intention of staying on.

She also hinted at the strength of her resolve by telling a Women Into Business award ceremony at the Banqueting House, London: “It is perhaps remarkable: the greater the challenge the greater the resolve and the greater the determination that brings success.”

The 600 guests were left in no doubt that Mrs Thatcher regards the current questions about her leadership as a spur to reasserting her position.

Although the Prime Minister's most senior colleagues did not point the finger directly at Mr Heseltine, they made clear that they believed his supporters had allowed their enthusiasm to run away with them.

Mr Heseltine was yesterday drafted into the campaign to save the Tory stronghold of Mid-Staffordshire, which Labour threatens to capture in a by-election this month. He was invited to join the campaign after weekend reports that he had been snubbed.

Mr Charles Prior, the Tory candidate telephoned the former minister and invited him to speak at two meetings tomorrow night.

He made the call after it was disclosed that a letter inviting Mr Heseltine to the constituency had apparently not yet reached him.

Mr Kenneth Baker, the Conservative Chairman, said: “Michael is a very good campaigner. He wants us to win.”

Ministers accept their former colleague's assertion that he has no intention of mounting any challenge to Mrs Thatcher and believe that he would not prosper personally by doing so. In addition, they are convinced Mr Heseltine believes that too.

However, it is argued, some of those who imagine they would gain if the former Defence Secretary were to become leader are not showing the same degree of patience.

One senior figure said yesterday that many MPs had come to realize that if Mrs Thatcher, as a sitting Prime Minister who had won three elections, were to be challenged and beaten by a figure from the left, the Conservative Party could be “unleadable for a generation” as furious right-wingers took their revenge.

With the atmosphere notably calmer yesterday, efforts were being made to assure Conservative MPs that Cabinet unity is probably stronger than at any time under Mrs Thatcher.

Mrs Thatcher's meetings with Mr Baker, Lord Young of Graffham, the Conservative Deputy Chairman, and business managers including Mr Timothy Renton, the Chief Whip, covered the present problems of morale. However, possibly in an attempt to display that it was business as usual, the Downing Street meetings did not extend to a further session over lunch.

Meanwhile, Lord Whitelaw, the deputy leader of the Conservative Party, warned Mr Heseltine that it would be “very unwise” of him to challenge the Prime Minister. Lord Whitelaw firmly backed Mrs. Thatcher but admitted that Tory MPs were worried about the poll tax.