LORD SAATCHI, the former Conservative chairman, charged the party £1.5 million for the services of his advertising companies in the general election campaign that he helped to create.

The revelation that Lord Saatchi billed the cash-strapped party while he was chairman has astonished senior Tories. When he resigned from the Shadow Cabinet after the election defeat he delivered a withering denunciation of the campaign that centred on asylum and immigration.

The payments to Lord Saatchi’s companies are revealed in the newly published Conservative Party accounts for 2004 which state: “Central Office purchased services and paid commission amounting to £339,000 and £207,000 respectively from the Immediate Sales Company and M&C Saatchi companies in which Lord Saatchi has an interest.” A further £19,000 was paid in 2003.

The Times has learnt that Lord Saatchi invoiced the party for a further £1 million for work in 2005 before polling day. The 2004 accounts showed that he made a £6,000 donation to the party. The Immediate Sales Company has subsequently pitched for commercial contracts on the back of the work done on the Tory campaign.

Most members of the board of the Conservative Party were taken aback to discover that Lord Saatchi’s companies had financially benefited from a campaign he publicly criticised in a newspaper article within days of the defeat, and later in a pamphlet for a Tory think-tank. A senior Tory official said: “The board has decided to declare in the accounts any potential conflicts of interest. Maurice (Saatchi) may be uncomfortable to see his transactions in the accounts, but so be it. Maurice was not popular after he went public with his criticisms of the campaign which, as co-chairman, he was partly responsible for. I think he will be even less popular when people discover just how much money he has charged the party.

“I am sure his companies did a great job. But you have to ask. Was the work put out to tender? Were there no other companies capable of doing the work as well?” Lord Saatchi did not return telephone calls yesterday. A Conservative Party spokesman declined to comment.

In a pamphlet for the Thatcherite Centre for Policy Studies last month, Lord Saatchi accepted his responsibility for the campaign, in which the Tory party barely improved its share of the vote from the disastrous 2001 election.

He said that the campaign had not projected a “noble purpose” and had been led instead by focus group research and opinion polls. “If you don’t stand for something you will fall for anything,” he said, adding that the Tories had been wrong to fight the election on the issue of immigration.

They had underestimated the voters’ intelligence by promising lower taxes when taxes would have to rise, he said. He attacked the strategy that treated voters like “morons” who could understand a message only if it was delivered by Brad Pitt or Tom Cruise.

Comparing the election to a Basil Fawlty campaign he said that the Conservatives had made the major mistake of saying, “Don’t mention the economy” — an area that traditionally had been the party’s major strength.

Despite his criticisms, the Immediate Sales Company has been pitching for new business on the back of the work. In a letter to potential clients, Michael Moszynski, the chief executive of the firm that is 80 per cent owned by Lord Saatchi’s advertising empire, claimed: “We created a campaign that, while it might not have won the party the election, did help to secure their biggest electoral success for 22 years.”

The brochure reproduced the Tory advertisements including the slogan, “Are you thinking what we’re thinking?” and the hardline posters such as, “It’s not racist to impose limits on immigration”.

Lord Saatchi rose to fame in 1979 when he coined the slogan “Labour Isn’t Working” for Margaret Thatcher’s election campaign, helping the Conservatives to defeat Labour. He was also said to be behind the “demon eyes” poster of Tony Blair.

He founded M&C Saatchi with his brother Charles in 1995 after they were ousted from Saatchi & Saatchi, the agency they founded in 1970.

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