In the Westminster version of I'm a Celebrity... Get Me Out of Here!, it is George Osborne who is being force-fed bugs and made to catch eels. The right-wing vultures are circling around the Shadow Chancellor, screeching that he must be replaced with a bigger beast. The City's pinstriped tigers are prowling, the media's hungry hyenas are baying for blood. The Conservative jungle looks far more dangerous than anything seen on television.

Mr Osborne's error in playing footsie with a Russian billionaire on a yacht in Corfu was, his critics believe, compounded by his failure to articulate a clear plan when the FTSE went into freefall at home. The pictures of him in a Bullingdon Club waistcoat enhanced his reputation as an out-of-touch whippersnapper. His suggestion at the weekend that rising national debt could generate a full-blown sterling collapse led to more cries of “sell”. As Dave's best friend, and closest political ally, Mr Osborne is as safe as houses, of course (safer, in fact, given the state of the property market).

But the row over the Tories' economic policy is not really about the Shadow Chancellor, or his tax plans - it is about the direction of the party as a whole. The barrage of criticism is, in fact, a cry of frustration from those who have never really accepted that the Conservatives have to change. It is no coincidence that the charge is being led by Lord Kalms, who supported David Davis rather than David Cameron for the leadership and has long expressed scepticism about modernisation.

In the view of the traditionalists, Mr Cameron and Mr Osborne are foolish upstarts betraying the party that they claim to be trying to save. These critics are “small c” conservatives who prefer the ideological purity of opposition to the compromises of power.

Over Europe, gay marriage and grammar schools, they have flexed their muscles in vain - and they are now seizing on the downturn to demand unfunded tax cuts. It is nothing to do with the recession. These right-wing Tories do not want a fiscal stimulus of the sort advocated by Gordon Brown - they are ideologically committed to tax cuts to reduce the size of the State.

The truth is that the whispering campaign against Mr Osborne shows how shallow support for the Cameron project really is. As the Tory poll lead narrows, so the traditionalist roar grows - just as Labour leftwingers turned on Tony Blair when they started to doubt that he was a winner.

“They're gunning for George because they can't gun for Dave,” one senior strategist says. “They're in a frame of mind from the Conservatives' past, they want short-term populism rather than long-term strategy.”

The Shadow Chancellor has in recent days started to set out an economic policy that is both clear and distinctive from Mr Brown's.

A bright blue line divides Labour and the Conservatives over the acceptable level of borrowing and the role of the State. Mr Osborne portrays the Prime Minister as a political version of a short-seller, constantly borrowing more money in the hope that his gamble will eventually pay off. By giving warning of a run on a pound, he was simply giving a vivid illustration of the dangers of government debt. His aim is to give the voters a clear choice at the next election between tax cuts funded by savings and tax reductions paid for by borrowing.

Today, Mr Cameron will raise the stakes by admitting that the Tories would be willing to scale back spending on public services to pay for tax cuts. He will make the case that the Conservative promise to “share the proceeds of growth” between tax cuts and spending rises can still apply in a recession - but that if there is no economic growth then increases in public spending will have to be lower. Until now, the Tories have been promising to match Labour's spending commitments for at least the next two years, but that is now up for grabs.

When Alice Thomson and I interviewed Mr Osborne last week he emphasised that there was “no blank cheque” for the public services. “The public sector needs to be very conscious that this country is going through a difficult time,” he said. “You don't want to add to unemployment but you want to make sure that the jobs people are doing are worthwhile.”

The shift is quite significant. It would allow the Conservatives to match any tax cuts proposed by Labour in the Pre-Budget Report - but to pay for them by reduced spending rather than increased borrowing. It gives Mr Osborne much greater flexibility to make proposals on his terms - rather than on those of his party's Right. Raising health spending in line with inflation (as opposed to at 2 per cent above inflation, as the Government has promised) could save as much as £7 billion a year.

But the change is also a risk, because it leaves the Conservatives open to the charge (which Labour is bound to make) that they are out to destroy schools and hospitals.

The promise to match Labour's spending commitments was originally made to neutralise the perception that the Tories lack commitment to public services - just as Labour promised in 1997 to stick to the Conservative spending limits to reassure voters that they were not about to embark on an unaffordable spending spree.

Mr Cameron hopes that it will be difficult for Mr Brown to accuse him of creating a black hole in public spending if he has himself generated an enormous black hole of public debt. He also thinks that he has shed his party' “nasty” image sufficiently to be able to take a tougher line. It is hard, though, to predict how voters will react.

Paul Krugman wrote in The New York Times last week: “The usual rules no longer apply. Virtue becomes vice, caution is risky and prudence is folly.” As recession looms, politics too has, as W.B. Yeats put it, “all changed, changed utterly”.

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