Cameron versus Osbourne feud

The Daily Mail is reporting a feud between Osbourne and Cameron over tax. Cameron was apparently not entirely happy about Osbourne's non-doms announcement at the last conference and thought that Osbourne only got away with the whole stunt by the skin of his teeth. Peter Obourne writes:

For the past few weeks have seen the emergence of a dangerous divergence of opinion between the shadow chancellor George Osborne and David Cameron over tax cuts and the size of the State.

Osborne believes cutting taxes has become a vote winner rather than a political minefield. He is backed by Andy Coulson, the Conservative Party Director of Communications.

David Cameron, whose analysis is supported by his highly paid political consultant Steve Hilton, takes a much more cautious view.

Indeed, I am told that relations are 'strained' between the two most senior members of the Conservative Party, and that it was a relief to all concerned that both men set off for family holidays a week ago.

"David has lost a little bit of faith in George's economic analysis," says one well-placed source drily.

The key item at issue between the two is, at first sight, bizarre. It concerns the interpretation of George Osborne's dazzling announcement at the Tory Conference last autumn that a Conservative Government would double the inheritance tax threshold to £1million.

The Shadow Chancellor and his supporters maintain the announcement marked a tipping point in modern British politics.

They claim that the massively enthusiastic reception which met the inheritance tax pledge was a signal that tax-cutting is now a winning issue.

David Cameron's analysis of the party conference triumph is more sombre. The Tory leader has noted that the second half of Osborne's proposals - the tax on foreign residents which Chancellor Alistair Darling must now bitterly regret copying - has since collapsed.

I am told that Cameron now considers that the Tories only got away with Osborne's party conference stunt by the skin of their teeth.