Osborne denies 'Granita-style deal'

And in a joint interview for Thursday's Daily Telegraph, Mr Cameron laughed off suggestions that he might be undermined by his shadow chancellor plotting against him, as Gordon Brown was widely reported to have done with Tony Blair.

When Mr Osborne announced that he would not stand in the 2005 Conservative leadership contest, there was speculation that he and Mr Cameron - then the party's two rising stars - had hatched a deal similar to that thought to have been made by Mr Blair and Mr Brown in 1994.

Mr Brown is thought to have agreed not to oppose Mr Blair in the contest to find a replacement for John Smith, in return for a promise that he would take over as Labour leader after a certain time. Differences over the supposed deal are thought to have fuelled tensions between the two men throughout Mr Blair's time in power.

Asked if he had made a similar arrangement with Mr Cameron, Mr Osborne told the Telegraph: "We never had a deal."

He added: "We did talk about the leadership. But we made it clear that - certainly I made it clear - that this was a decision for each of us as individuals.

"Having a conversation with David about it in a way helped make my mind up. Not because he tried to dissuade me or anything, but because he was so clearly up for it and I so clearly wasn't."

Mr Cameron dismissed the notion he would be undermined by his Chancellor if he got to 10 Downing Street: "I haven't got some simmeringly bitter rival plotting and scheming. I don't feel all the time that he's seething and bubbling with rage."

And he insisted there was no plan in place for the succession to the Tory leadership when he eventually leaves office.

"I don't believe in politics in that way," he said. "The Conservative Party has a way of electing its leaders and it is, as they say, a matter for them. When they have had enough of me, I am sure they will find someone else."