Greater Manchester mayor Andy Burnham and local Labour MPs denounced the banner, which was strung across a footbridge with two human effigies dangling by their necks below.
Theresa May’s party is facing a weekend of protests in Manchester, with a national anti-austerity demonstration expected to attract thousands on Sunday and a cross-party pro-European rally due to be addressed by Liberal Democrat leader Sir Vince Cable and Tory ex-minister Stephen Dorrell.
Delegates arriving at Manchester Piccadilly station on Saturday evening ahead of the conference at the Manchester Central Convention Complex were greeted by an “unwelcome party” protest led by a choir singing anti-Tory songs.
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It was not immediately clear who was responsible for the banner, which was ironically described as “charming” by Conservative MP Michael Fabricant.
“What a charming welcome to Manchester and the Conservative Party Conference,” said Mr Fabricant.
“These aren’t protesters, they’re fascists.”
Mr Burnham and Labour’s Manchester Central MP Lucy Powell and Ashton-under-Lyne MP Angela Rayner were quick to distance the party from the “Hang the Tories” message.
Mr Burnham said of the banner: “This is just wrong. We will always protect the right to protest but never to threaten, abuse or incite violence. It should come down.”
Ms Powell said: “On behalf of our city and my constituency, we’re sorry about this. We disagree with and are angry with your policies, but we wish you no harm.”
And shadow education secretary Angela Rayner said: “This is disgusting and not the Manchester I know and love. Those that do this let Manchester down.”
There is no suggestion that the banner was linked to the protests being organised by the People’s Assembly Against Austerity, which is due to include speeches from actress Maxine Peake and musician Brian Eno as well as a march outside the conference centre.
Around 30 members of the Leeds-based left-wing Commoners’ Choir travelled to Manchester to take part in a “flash mob” protest at Piccadilly station.
They waved “Tories Out” placards as they sang songs with lyrics including: “People often ask me what it is that makes me tick - it’s Boris Johnson’s head upon a stick”, and: “You’re nowhere if you believe Theresa May” - a reference to the PM’s attack on “citizens of nowhere”.
The choir’s songwriter Boff Whalley said: “It’s meant in fun, but we’re trying to get a serious message across with a memorable tune.”
Speaking ahead of Sunday’s pro-European really, Sir Vince said: “It is vital that we keep up the pressure on the Government. The Conservatives are driving Britain over a cliff edge towards a reckless, extreme Brexit.”
And former health secretary Mr Dorrell, chair of the European Movement UK, said: “Democracy is a process, not an event.
“A healthy democracy is a dialogue in which all voices should be heard. And it must allow the voters to change their mind.”