MICHAEL HOWARD’S election as Conservative leader has ignited a new optimism among Tory supporters, according to a Populus poll for The Times, and prompted a deluge of cash from big donors.

However, the poll, undertaken between last Friday and yesterday afternoon, will leave Mr Howard fully aware of the scale of the electoral challenge facing the Tories.

It comes as Mr Howard undertakes a far-reaching overhaul of the Tory frontbench team and organisation. Yesterday, Theresa May lost the party chairmanship to allow Lord Saatchi, the advertising tycoon behind the Tories’ Thatcher-era election victories, to take charge of party organisation.

Mr Howard’s arrival has already changed the attitude of big donors. Lord Ashcroft, the former party treasurer, is making a £2 million donation and has appealed to others to follow suit.

Stuart Wheeler, the business man who last month publicly criticised Iain Duncan Smith’s leadership, and several other donors are said by Mr Howard’s advisers to be on the verge of making sizeable contributions again.

Lord Ashcroft met Mr Howard last Tuesday to offer cash to help the party to fight 150 key marginal seats, particularly those targeted by the Liberal Democrats (which include Mr Howard’s Folkestone and Hythe constituency) and those that the Tories must win to dent Labour’s majority. A spokesman for Lord Ashcroft said that he had feared a bloody leadership battle and was delighted with the way things had turned out. He and other donors had seen their optimism “go through the roof” in recent days.

Mr Howard yesterday indicated a fresh approach at Conservative Central Office by appointing two joint chairmen in Liam Fox and Lord Saatchi, who will revamp the party’s image and organisation respectively. Both have been personally close to Mr Howard.

Maurice Saatchi, who has been the party’s Treasury spokesman in the Lords where he has urged large tax cuts, will restructure the party’s political machine after the infighting of recent years.

Mr Howard said: “Maurice has a phenomenal track record. He has worked with the Conservative Party for well over 20 years. I have known Liam since he entered Parliament and he has the energy and enthusiasm to take our message to all parts of the country.”

Lord Saatchi said: “When Michael asked me to take on this job, my immediate reaction was ‘fantastic’. I am really honoured and I am determined to make this a great success for our party and above all our country.”

The new Tory leader will spend today finalising a streamlined Shadow Cabinet, probably with fewer than the present 26 members.

It is likely to include Oliver Letwin as Shadow Chancellor, as well as two key “modernisers” and several women in high-profile roles.

However, the Populus poll shows that the welcome for Mr Howard’s leadership from Tory MPs, donors and party activists has yet to be matched by voters.

Labour still leads the Tories, by 36 per cent to 31, unchanged on the past month. The Liberal Democrats are on 25 per cent, down a point since early October. However the poll underlines a big contrast in the belief of Tory supporters that replacing Mr Duncan Smith with Mr Howard deals with the continued doubts of voters.

Nearly a third of Tory supporters (30 per cent) believe that in replacing Mr Duncan Smith, the Tories have “dealt with the main reason why people didn’t feel able to vote for them, and they are now likely to do much better”.

But more than half of both the public and of swing or floating voters believe that the change “doesn’t make much difference to the reasons why people have not felt able to vote for the Tories and is unlikely to make them do any better”.

Mr Howard’s long record as a minister before 1997 is a mixed blessing. Most voters think it gives him the experience needed to be a potential prime minister but two thirds believe it makes it important for the Tories to show that they really have changed.

A central question will be how many leading Tories Mr Howard brings back from the backbenches. Francis Maude, an ally of Michael Portillo, is to be brought into the fold despite the disquiet of senior rightwingers.

The new Tory leader is expected to draw on all wings of the party. Stephen Dorrell, the former Health Secretary, from the Centre Left, is widely expected to be offered a post. Caroline Spelman and Julie Kirkbride are expected to be promoted.

Dr Fox, the former Shadow Health Secretary who masterminded Mr Howard’s smooth succession, will be responsible for reinvigorating the party’s media machine, policy unit and campaigning wing.

Dr Fox said that there was a new mood of optimism in the party. Hinting at past unhappiness among senior Tories with the way Conservative Central Office has been run, he said: “Many have felt that the talents of the party chairman have been spread too thinly.” He described the current party machine as “a bit rusty”.

Ian McCartney, the Labour chairman, accused Mr Howard of putting “the old Thatcherite team back together again. Lord Saatchi believes in big cuts in public spending, Liam Fox in charging people for healthcare.”

Alan Milburn, the former Health Secretary, said that Labour should fight Mr Howard on the centre ground. He told The Times: “The challenge for us is not to return to the old certainties, into an old Left position. That would be the worst thing we could do.”

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