Theresa May named as Tory chair

The Tories appointed their first ever female party chairman today as Iain Duncan Smith moved ruthlessly to demote his former leadership rival David Davis to a lower-grade shadow cabinet job.

Mr Duncan Smith removed Mr Davis from his key post at party headquarters and replaced him as chairman with shadow transport secretary Theresa May.

In a classic coup, Mr Davis was contacted on holiday in Florida to be told he must stand down and to be offered a newly created role with responsibility for local government and the regions.

After spending some time considering the offer, a stunned Mr Davis accepted the role which will see him shadowing John Prescott but which, crucially, does not offer a status parallel to that of the Deputy Prime Minister.

The Tories' deputy leader will still be Michael Ancram, who was kept in his post as shadow foreign secretary.

Senior sources denied it was a demotion for Mr Davis - but it was immediately seen as such across Westminster where speculation that Mr Davis was to be punished for a perceived lack of loyalty to Mr Duncan Smith had reached fever pitch.

The reshuffle is described as " limited" and it is being stressed that the main shadow cabinet office jobs - foreign affairs, home affairs and Treasury - were staying in the hands of Mr Ancram, Oliver Letwin and Michael Howard.

The appointment of Mrs May, 45, is being talked up as a breath of fresh air after decades when the Tory chairmanship was held by a series of men such as Cecil Parkinson, Ken Baker, Jeremy Hanley and Sir Norman Fowler. She would, it was said today, strive to increase the number of Tory candidates from the ranks of women and ethnic minorities. She is to be known as "chairman", however, rather than "chair" or any more politically correct title.

A leading official said: "She will drive home the message that the Tory party is changing. It is becoming more open and decent and she symbolises that change."

She does not favour imposing Labour-style all-women shortlists on Tory constituency associations looking to choose candidates.

Mrs May staged a swift rise up the Tory ranks after being one of just five women elected for the first time in her party's devastating 1997 election defeat under William Hague.

Mr Duncan Smith made her transport spokeswoman last year - setting her against Stephen Byers in showdowns where she was accused of failing to land a killer blow.

Party officials, in a bid to prevent the demotion of Mr Davis being portrayed as outright humiliation, said he would remain on the party's strategy-group and on the Policy Board, which includes the senior members of the shadow cabinet. He will take the resounding title of 'shadow Secretary of State for the Office of the Deputy Prime Minister'.

But there was no disguising the ruthlessness of shifting him after 10 months. The local government job, whatever its title, falls well down the shadow cabinet pecking order, behind the shadow chancellor, home secretary, foreign secretary and several others.

He had come under increasing fire from within Tory Central Office and beyond. There were complaints that he had been half-hearted in backing the new image of the party as allies of the vulnerable and lacklustre in raising morale.

Behind that lay the more damaging suspicions that he was positioning himself to mount a leadership challenge should the Conservatives fail to be making headway against Labour next year.

Other changes to Mr Duncan Smith's front-bench team were being revealed later in the day.