Michael Portillo, a former Conservative Defence Minister, won selection as the party's candidate for the Kensington and Chelsea by-election on November 25. The London constituency is the second safest Conservative seat in the country and is expected to ensure Portillo's return to parliament by the end of the year.

This is the outcome of Portillo's efforts to reposition himself as a potential leader of the Conservatives, under conditions in which the party has been reduced to a virtual rump. He was the darling of the Conservative right for many years. Viewed by many as Margaret Thatcher's natural successor, under her leadership he was awarded with portfolios in defence, the Treasury, transport and local government. Portillo was one of the few leading Tories said to have pleaded with Thatcher against her decision to stand down as party chief in November 1990. He gained notoriety as one of three right-wing "bastards" Prime Minister John Major, Thatcher's successor, complained of in his cabinet.

Portillo's defeat in the 1997 general election symbolised the huge anti-Tory backlash that swept the country. Scenes from the election count showing him losing in the formerly safe Conservative seat of Enfield proved so popular that it was sold on video. In an interview with the Guardian newspaper earlier this year, Portillo said that he had already been "tipped off" about his 1997 result prior to reaching the stage. “It was difficult to compose my face. I didn't want to look sad, nor to grin inanely", he went on. This defeat, combined with news of the Tories disastrous results across the country, convinced him that the "game was up".

During his enforced two-and-a-half-year absence from parliament, he has sought to distance himself from his hated image as a Tory grandee and acquire a more sympathetic persona. To this end, he was photographed working for a trial period as a porter in a National Health Service hospital, and made several television programmes—including one that drew heavily on his father's personal history as a Spanish socialist who had fled Franco fascism. He has criticised the Conservative Party for becoming too closely associated with arrogance and greed and confessed to making some "stupid" and "idiotic" speeches in the past.

In an interview with the Times newspaper earlier this year, Portillo confessed that he had "some homosexual experiences as a young person". He was at pains to make clear that these experiences were only "mild" and the outcome of youthful excess, and stressed that they had not been repeated since. Whilst in government, Portillo opposed equalising the age of consent for homosexuals and blocked the admittance of gays into the military, a record he has defended.

His admission to having had gay sex was forced upon him by the knowledge that his political opponents—most probably within the Tory Party itself—could use the information to damage any future leadership challenge. Almost immediately following the interview, senior Tories began to question Portillo's candidacy. In the weeks leading up to the selection contest in Kensington and Chelsea, long-time Thatcherite Lord Tebbit accused Portillo of lying about the extent of his sexual "deviance" and of "softening" his beliefs to such an extent that it was no longer clear he was on the right.

Tebbit's concerns notwithstanding, Portillo's style may have changed but the substance remains the same. On all the economic issues—such as cutting taxes, slashing public spending and opposing British membership of European Monetary Union (EMU)—Portillo remains firmly on the right. More importantly, the Tories are not in a position to turn Portillo down. The 1997 election was a major crisis for the party, removing many leading figures, particularly on its right wing. Like Kenneth Clarke and Michael Heseltine, most of those remaining were pro-Europeans. In selecting the party's new leader when John Major resigned, the Thatcherites were forced to come down in favour of William Hague, a political nonentity.

With his return to parliament extremely likely, there is open speculation of a future leadership clash between Hague and Portillo. Conservative clubs around the country were said to have staged excited celebrations on hearing of Portillo's selection, because they could now get the leader they had wanted. Although he has repeatedly pledged his "loyalty" to Hague, for some months the latter is said to have been planning ways of ensuring Portillo does not steal his limelight.

Portillo's return portends problems for the Labour Party as well. Essentially, he has sought to refashion himself as a Blairite figure—combining apparently liberal noises with a monetarist agenda. Blair and Portillo both addressed the Confederation of British Industry's annual conference in Birmingham on Tuesday. The only identifiable difference between the two was their stance on EMU and the adoption of the euro, with Blair maintaining a "when the time is right" approach to membership, while Portillo almost ruled it out completely.

The Tories view opposition to the euro as the basis on which they can rebuild support. An opinion poll in the Financial Times earlier this week found that whilst big business supported Britain signing up to the euro, much of manufacturing industry and small business was against. It is these amongst these layers that the Tories, and Portillo, hope to win support.