Tories deny inheritance tax split

He appeared to pour cold water on the flagship policy of shadow chancellor George Osborne, describing plans to abolish the tax as an "aspiration".

But the party later rushed out a statement pledging that they would honour the promise and would include it in the election manifesto.

Business Secretary Lord Mandelson said that Mr Clarke's comments indicated that he was out of line with Mr Osborne and Tory leader David Cameron.

"Ken Clarke's comments have thrown George Osborne's tax plans into confusion," said Lord Mandelson. "The thing about Ken is that he just cannot help but say what he thinks.

"On economic and taxation policy, as on so many issues, his views are nearer to the Government's than to the Cameron-Osborne Tory Party."

But Clarke himself issued a further statement dismissing suggestions of a split.

"So far as I am concerned, we are fully committed to raising the threshold for inheritance tax in the first Parliament of a Conservative government, as George Osborne has promised," he said.

"This measure will appear in the manifesto and I support it. We also all agree that George Osborne cannot write his first Budget until we have seen what we have inherited. I cannot see any significant difference between what I have said and what my colleagues have said."

The inheritance tax policy was credited with turning round the Tories' fortunes and ending Labour's "Brown bounce" in the polls when it was unveiled in 2007, though it has since come under fire from Labour as a tax break for millionaires.