Reshuffle deals Tories mixed hand

• Rising star of Tories becomes shadow Chancellor

• Mix of old and new is recipe for frontbench reshuffle

• Howard will remain leader for now

Key quote

"He’s promoted his favourites with no regard for the rest of the party or even bothering to consult anyone. It’s just going to bring it all forward - people won’t stand for this, and things are already moving." - Anonymous Tory

Story in full

GEORGE Osborne, the 33-year-old rising star of the Conservative Party, was yesterday named shadow chancellor by Michael Howard in a controversial reshuffle of his shadow cabinet.

The Tory leader chose a mixture of trusted old guard and new blood to revitalise his frontbench team. But some party critics said yesterday Mr Howard’s reshuffle could backfire and hasten his departure.

Mr Howard appointed Sir Malcolm Rifkind, the former foreign secretary, as shadow work and pensions secretary. David Cameron, another rising star, was made education spokesman, while Liam Fox, the party chairman, was appointed shadow foreign secretary.

Some leading Tories saw the appointments as a sign of favouritism by the departing leader, which may further fuel suspicions Mr Howard is trying to influence his succession by promoting so-called modernisers who could oppose David Davis.

Despite announcing his resignation last week, Mr Howard may, as revealed in The Scotsman yesterday, remain leader well into next year.

The reshuffle left some Tories angry. "He’s promoted his favourites with no regard for the rest of the party or even bothering to consult anyone," fumed one senior Conservative. "It’s just going to bring it all forward - people won’t stand for this, and things are already moving."

Another leading Tory described Mr Howard’s moves as "mad, mad, mad".

Last night, Eric Forth, a close ally of Mr Davis, called for the process leading to the replacement of Mr Howard to be speeded up, saying the party needed a "swift resolution."

Even before yesterday’s reshuffle, leading Tory financial backers were publicly suggesting that Mr Howard had made himself a lame duck by his announcement.

In his new post, Sir Malcolm, who returned to parliament last week, will clash with Labour’s David Blunkett. The pensions post is likely to have a high profile: Labour’s third term is set to be dominated by debate over possible welfare reform and compulsory pension savings.

While Sir Malcolm is emerging as one of the leading modernising contenders for the party leadership, the ascent of the younger generation of Tories may arouse speculation about their prospects for higher office. Should Mr Howard stay in his post for the rest of the year or beyond, the delay could allow Mr Osborne or Mr Cameron to prove themselves at the highest level, and ultimately to challenge for the leadership.

Yet the new posts could also be the undoing of the younger MPs, Mr Osborne in particular.

Since Labour came to power in 1997, Gordon Brown, the Chancellor, has bludgeoned a string of Tory shadows into submission: only Mr Howard has come close to troubling Mr Brown at the dispatch box.

"Yes, he’s a big figure in parliament, but actually I think the economic policies he’s pursuing are the wrong ones," Mr Osborne said last night. "I shan’t be afraid to point that out."

Confirming his growing influence in the party, the former Treasury minister Francis Maude was yesterday named Tory chairman. Mr Maude has been off the front-bench for several years but has been an advocate for the modernisation of the party.

Rumours within the party suggest Mr Maude has been acting as an unofficial convener of a group of leading modernisers who are discussing backing a single candidate for leadership in opposition to Mr Davis.

In an effort to counter- balance Mr Maude’s rise, Mr Howard appointed Andrew Mitchell, a key Davis backer, to the shadow cabinet to speak on international development.

While Mr Howard’s relations with Mr Davis are by no means warm, the departing leader has been stung by suggestions that he is trying to tilt the leadership against the shadow home secretary.

Partly because of those suggestions, there was never any serious prospect of Mr Howard moving Mr Davis from his post yesterday.

Several of Mr Howard’s earlier campaign appointments remain unchanged, among them two possible leadership contenders: Andrew Lansley, the low-key health spokesman, and John Redwood, the Thatcherite deregulation spokesman.

Among those demoted in the reshuffle yesterday were Michael Ancram, the party’s deputy leader. Mr Ancram gives up his foreign affairs brief and will speak on defence.

And Oliver Letwin, the affable former shadow chancellor, was granted his wish for a quieter post, and will take the agriculture portfolio.