As an independent commission set up by the party prepares to call for tax reductions of about £19.5 billion a year, and demands grow from activists and MPs for cuts, George Osborne, the Shadow Chancellor, says that those on the Right will be disappointed. “We will not blink . . . we will not budge, “ he says in an interview with The Times, stressing that he and David Cameron are united on the issue.

“Given the current state of the public finances it’s unlikely we are going to be making promises of upfront tax cuts at the general election, because the public finances cannot sustain that.”

If people think that the Conservatives can meet the challenges facing Britain by producing tax cuts three weeks before a general election “like white rabbits out of a hat”, they are wrong, he continued. He does not intend to repeat what happened at the last two elections, when cuts were promised and the Tories lost heavily.

His strong words caused consternation in Tory circles last night. Party strategists have been hoping to stage a “unity conference”, contrasting sharply with the infighting that has engulfed Labour in recent weeks.

A source close to the party’s tax commission gave warning that the failure to endorse the principle of lower taxation would inflame the already strained atmosphere in the party. The source said: “Some people on the Right will be very disappointed by this.

“There is strong support for lower inheritance taxes, pension taxes, movement on stamp duty, and a lower overall tax burden.”

Another senior Tory involved in the review said that it would be ludicrous for the party to have a pitched battle over tax rates so early in this Parliament. But he added: “Lower tax rates can lead to more tax revenue, and we should not be afraid to say so.”

Matthew Elliott, director of the Taxpayers’ Alliance, said: “Opinion polls show the public are more likely to vote Conservative if they offer tax cuts, although they are selling them in the wrong way. They should stress cuts in personal taxes rather than business taxes.

“All the evidence shows that if you cut taxes, people work harder, you generate more growth and you get more money in the government’s coffers." Mr Osborne’s remarks also appeared likely to disappoint voters. A Populus poll yesterday for BBC 2’s The Daily Politics found that 55 per cent thought that the Tories should reduce the tax burden if they were elected, with 37 per cent disagreeing.

Mr Osborne has spoken out before the Bournemouth conference, which starts tomorrow, because of the leaking of the tax commission proposals.

The review was meant to ensure that the plans would be a rallying point for activists and traditionalist MPs. But its proposals, including cuts in income tax, corporation tax and inheritance tax, has alarmed the leadership, which is trying to restore the party’s reputation for economic competence.

Mr Osborne’s words are likely to upset the Right. But many will back Michael Howard, the former leader, who told The Times yesterday that the new leadership must be allowed to get on with modernising the party.

Mr Osborne’s impatience with the commission is obvious. “Let’s get some things absolutely clear: economic stability will come before tax cuts. If it comes to a choice between the stability of the economy, people’s interest rates and mortgage rates, and cutting taxes, then we will choose economic stability. That’s the first thing people need to know about us.”

The Populus poll had mixed findings for the Tories. Only one third of those questioned agreed that Gordon Brown had demonstrated he was ready was to be Prime Minister. But only 35 per cent thought Mr Cameron would make a better leader of the country than Mr Brown, and 51 per cent disagreed.

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