SADDO CABINET

TORY leader David Cameron was facing a desperate battle on two fronts last night-to STOP Labour's comeback in the polls and QUELL a potential rebellion in his own ranks.

In a secret memo seen by the News of the World he ordered Tory chiefs to DRESS UP old policies as new in a bid to steal the political limelight.

The move has been sparked by his poll lead being HALVED and worries that Labour is now setting the pace-thanks to the return of arch spin doctor Peter Mandelson.

But his plans to BAN the Shadow Cabinet from having outside business interests could end in revolt from a team including 19 MILLIONAIRES.

The memo, from Cameron's Director of Policy and Research James O'Shaughnessy, comes after polls last week showed the Tory lead over Labour DOWN from 18 to nine per cent.

O'Shaughnessy tells senior Tories that Labour is "filling the newspapers"-and says they must do the same.

He says: "It won't have escaped your notice that the Government has been very active in announcing new policies in the last couple of weeks.

"As befits the return of Mandelson this is mostly spin. However, they are filling the newspapers and we need to respond.

"We need ensure we have a strong and steady flow of our own policy ideas, speeches and announcements to release between now and Christmas.

"Please note that these do not need to be economy themed.

"Nor do they necessarily need to be brand new. Ways of refreshing existing policy, perhaps a policy we announced previously but didn't get much attention, can be very successful."

The memo, ordering a rehash of old policies, is a major humiliation for Cameron, who promised voters: "We have the fresh answers to the challenges of our age" in his speech to the Tory Conference last month.

And there could be further problems ahead over his aim for the Shadow Cabinet team to stop all outside work and put their assets into trusts ahead of the next election.

But with 19 of them millionaires he could face a revolt. Some, including policy chief Oliver Letwin, still work part-time for merchant banks or other companies.

Shadow chief Treasury secretary Philip Hammond is another, earning £2.7million from his own property company in the past five years.

And Shadow Foreign Secretary William Hague has earned millions from writing, consultancy work and speeches.

A source from Mr Cameron's office admitted: "We cannot have potential conflicts of interests as we try to look like a government-in-waiting. However, this is not a popular project and we are getting a lot of resistance.

"There will come a point when David will have to issue an order but we are worried we could lose some people over this."

A senior member of the Shadow Cabinet told us: "I don't want to take a pay cut 18 months before a general election just so it looks good on paper. We all go to extraordinary lengths to ensure there are no conflicts of interests.

"Some people could lose out on £200,000 a year by this, and I know one or two would walk out if that were imposed now."

ian.kirby@notw.co.uk

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