Howard hands out the big jobs

Theresa May was a surprise survivor today as Michael Howard appointed a sharply slimmed-down new shadow cabinet.

Mrs May, who famously described the Conservatives as the "nasty party", was removed only yesterday from her post as Tory chairman.

But today she bounced back with the job of shadow environment and transport secretary.

In a careful balancing act, leading moderniser Oliver Letwin was named as shadow chancellor.

And there were senior jobs for two potential leadership challengers who stood aside to give Mr Howard a clear run. David Davis, from the party Right, becomes shadow home secretary, promising a tough fight with his Labour opposite number, David Blunkett.

And Tim Yeo, another of the modernisers, becomes shadow education and health secretary. Liam Fox and Lord Saatchi are joint party chairmen.

Mr Howard handed out a whole series of double posts in a move to slim down his top team to no more than 12, half the total under his predecessor, Iain Duncan Smith.

Another survivor was Michael Ancram, also a potential leadership rival, who stays on as shadow foreign secretary. But almost every other position around the shadow cabinet table is changed.

Former minister David Willetts, known at Westminster as "Two Brains", becomes shadow cabinet minister responsible for policy development, a move which will give him a key role in writing the next manifesto.

And in a major gesture to the party's pro-Europeans and their leading figure, Kenneth Clarke, a front-rank pro-EU figure, David Curry, will shadow John Prescott. The team, to be formally announced this afternoon, features some notable absentees. There was no post for ex-leader William Hague and it appeared he had decided to stick with his high earnings in the business world rather than return to the front rank.

Former health secretary Stephen Dorrell, a moderate strongly tipped for a return, was not included in the first list of names.

And another member of the party's liberal wing, Damian Green, was demoted to environment spokesman outside the shadow cabinet.

The procession to Mr Howard's office began at 9am. But it came with no sign that the new Tory reign has, so far, helped woo the voters.

The latest opinion poll, by Populus in today's Times, was a disappointment for Tories hoping for an immediate bounce as a result of the change of leader.

It showed Labour still leading by 36 per cent to 31, unchanged from last month, with the Liberal Democrats at 25 per cent.

An ICM poll in yesterday's News of the World put the Tory ratings down two points since last month to 31 per cent, with Labour eight points ahead.

There was better news for Mr Howard as big Tory donors lined up to promise funds after a near strike towards the end of Mr Duncan Smith's troubled two-year leadership.

The party's former treasurer Lord Ashcroft met the new leader to offer £2 million to fight 150 key marginal seats.

That money could help save Mr Howard's own political skin at the next election at his Folkestone and Hythe constituency where a fairly narrow majority has been targeted by the Liberal Democrats.

Other big backers, notably spreadbet tycoon Stuart Wheeler, were said to be set to follow.