A bitter row about Conservative economic policy burst into the open at the party conference today when a succession of senior Tory figures called on David Cameron to put tax cuts at the heart of the party's manifesto for the next election.

Leading the charge was Norman Tebbit, the former party chairman, who earned rapturous applause at a meeting on the fringe of the conference when he read out tax-cutting policies from two of the manifestos which delivered landslides to the Tories under Margaret Thatcher.

Lord Tebbit told the meeting: "We know that tax cutting works. We have tried it and it works. We tried raising taxes - that doesn't work.

"If we aren't careful, the way things are going, we are going to be the only party at the next election that doesn't believe in lower taxation."

Also arguing for tax cuts, through a pamphlet from the Thatcherite No Turning Back group, were Edward Leigh, chairman of the influential Public Accounts Committee, and John Redwood, the rightwinger who heads Mr Cameron's economic competitiveness commission.

Mr Cameron and his Shadow Chancellor, George Osborne, have told the party that they have no intention of making any uncosted upfront promises to cut taxes without knowing what state the country's finances will be in by the time of the next election.

Instead, trying to regain the upper hand on the key electoral test of economic competence, Mr Osborne has stressed the need to put economic stability - including low mortgage rates and low inflation - first.

Speaking at the launch of the No Turning Back pamphlet, entitled The Case for Lower Taxes, Mr Leigh insisted today that the at least 100 of the party's 198 MPs wanted tax cuts set out now.

"If the Conservative Party does not promise tax cuts then it's nothing. That's what Conservative parties do through history," he said.

He was backed by Mr Redwood, who complained in a foreword to the pamphlet that Britain is "groaning under the weight of taxation".

He adds: "Lower taxes are not a desirable extra that you can add when everything is going fine Lower tax rates are the way to get everything going well.

"This pamphlet is a plea for early action to cut our tax rates, before more jobs have gone abroad in search of a more fertile soil for enterprise."

Mr Cameron used his opening-day address to the party conference yesterday to signal a clear break from the party's Thatcherite past as it builds a policy platform in the centre ground of British politics.

Many observers believe that Mr Cameron and Mr Osborne, his closest political ally, have secretly engineered the tax row as a means to make that break even clearer - and move the party closer to the political centre - in the same way that Tony Blair ditched Labour's commitment to nationalisation in the mid-1990s.

The ferocity of the battle may have surprised them, with Lord Tebbit even taking a dig today at Mr Cameron's Eton education, a luxury "most of us aren't well off enough" to enjoy.

Mr Osborne made his reply this afternoon at a packed fringe event organised by The Times where his cool reception from activists reflected the party's deep concerns.

The Shadow Chancellor denied, however, that either he or Mr Cameron were trying to pick a fight with the party's old guard.

He said: "We are not looking for a Clause Four moment. We are not looking to have a battle with our party members - these are party members who have stood with us. "The Conservative leadership is not looking for a fight with 'unreconstructed Tories'."

Challenged on why he would not commit himself to reducing taxes, the Shadow Chancellor replied: "We have started to talk about issues like interest rates, mortgage rates, inflation.

"I have been determined to have an economic policy for our party which doesn't just have tax as our centrepiece but also talks about stability.

"You have got to say to people if it comes to a choice between cutting taxes and economic stability we would choose economic stability first. We would put mortgage rates above tax rates."

He added: "I believe in lower taxes and sharing the proceeds of growth. But if someone asked what is your number one economic priority it is economic stability and it was for the Thatcher government. And as well as being right our tax policy is popular."

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