Tories feud over repaid cheque

Renewed feuding over election cash and strategy erupted within Conservative ranks yesterday as key players quarrelled over a £2m private fund set up by Lord Ashcroft, a former party treasurer, to help Tory candidates in marginal seats.

The row pitted Lord Maurice Saatchi, the advertising tycoon who is Tory co-chairman, against Lord Ashcroft, the multi-millionaire whose Belize-based business empire has attracted hostile attention.

The ostensible cause of yesterday's squabble was a cheque for £500,000 which the Tories' treasurer, Jonathan Marland, gave to Lord Ashcroft 10 days ago.

Reports in some Sunday papers indicated this was a sign that Lord Ashcroft had fallen out with the party, to which he has given £10m from his alleged £1bn fortune over the past decade.

In fact the cheque was a down payment on an overdue loan he made to help finance the cost of the Tories moving from their previous headquarters in Smith Square, Westminster.

Behind the dispute is a row over how ambitious the party should be at the next election. Lord Ashcroft has made little secret of his belief in a strategy of fighting only winnable seats against the Saatchi view that the party must fight to win all the 160 seats it needs to form a government. Lord Ashcroft has set up a fund to which aspiring Tory candidates can apply for what the peer's spokesman said last night were donations of up to £45,000. Sixty such candidates dined with him last week. "This is a struggle of personalities between two big egos," said one source close to the quarrel.

Last night the Ashcroft camp said that far from demanding the repayment of the £500,000 he was being asked to lend another £2m to be repaid within a year. Tory HQ said Lord Saatchi was "contented" with his dealings with Lord Ashcroft who is "a very serious supporter" of the party.