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Howard Flight has quit as Conservative deputy chairman over comments he made about the party's spending plans.
The MP, who is the Tories' special envoy to the City, apparently admitted the scale of planned cuts were being concealed to help win an election.
A party spokesman, who confirmed the resignation on Thursday night, said the views did not represent party policy.
Mr Flight, a banker who represents Arundel and South Downs in West Sussex, said he "regrets his choice of words".
'Out in open'
Labour's election chief, Alan Milburn, seized on the resignation: "He has revealed in private what the Tories dare not admit in public - that they are secretly planning cuts to public services over and above the £35 billion they have already confirmed.
"The Tories' secret plan for devastating cuts to frontline public services is now out in the open."
Mr Flight, a Eurosceptic, was involved in setting up the James review into public spending which identified £35bn of savings.
I regret my choice of words which do not accurately reflect the process of the James committee, with which I have been closely involved and totally support.
Howard Flight MP
In a statement on Thursday, he said: "I regret my choice of words which do not accurately reflect the process of the James committee, with which I have been closely involved and totally support.
"I want to make it clear that the conclusions of the James committee represent the settled view of the Conservative Party on cutting waste, removing unnecessary bureaucracies, giving taxpayers value for money and protecting and enhancing frontline public services."
'Politically acceptable'
Mr Flight made the controversial comments at a meeting of the Thatcherite Conservative Way Forward group.
He told the audience: "The potential for getting better taxpayer value is a good bit greater than the James findings (which have been) 'sieved' for what is politically acceptable and what is not going to lose the main argument."
A tape of his comments was leaked to The Times.
He hinted that further tax and spending cuts would be possible once the Conservatives were in power because "everyone on our side of the fence believes passionately that it will be a continuing agenda".
Mr Flight said after an election had been won, "you can actually get on with what needs to be done".
'Nakedly political'
According to the newspaper, Mr Flight described the Tory proposal for pensioners' council tax rebates as "nakedly political".
He suggested further vote-winning promises were likely to include raising income tax and inheritance tax thresholds "so that Middle England comes out of the equation for the time being".
Mr Flight, first elected in 1997, is one of the most Eurosceptic members of the Conservative Parliamentary Party.
He has said he would never vote in favour of a single European currency and used to work for Norman Tebbit, sharing many of his mentor's views on Europe.
The MP, who is the Tories' special envoy to the City, apparently admitted the scale of planned cuts were being concealed to help win an election.
A party spokesman, who confirmed the resignation on Thursday night, said the views did not represent party policy.
Mr Flight, a banker who represents Arundel and South Downs in West Sussex, said he "regrets his choice of words".
'Out in open'
Labour's election chief, Alan Milburn, seized on the resignation: "He has revealed in private what the Tories dare not admit in public - that they are secretly planning cuts to public services over and above the £35 billion they have already confirmed.
"The Tories' secret plan for devastating cuts to frontline public services is now out in the open."
Mr Flight, a Eurosceptic, was involved in setting up the James review into public spending which identified £35bn of savings.
I regret my choice of words which do not accurately reflect the process of the James committee, with which I have been closely involved and totally support.
Howard Flight MP
In a statement on Thursday, he said: "I regret my choice of words which do not accurately reflect the process of the James committee, with which I have been closely involved and totally support.
"I want to make it clear that the conclusions of the James committee represent the settled view of the Conservative Party on cutting waste, removing unnecessary bureaucracies, giving taxpayers value for money and protecting and enhancing frontline public services."
'Politically acceptable'
Mr Flight made the controversial comments at a meeting of the Thatcherite Conservative Way Forward group.
He told the audience: "The potential for getting better taxpayer value is a good bit greater than the James findings (which have been) 'sieved' for what is politically acceptable and what is not going to lose the main argument."
A tape of his comments was leaked to The Times.
He hinted that further tax and spending cuts would be possible once the Conservatives were in power because "everyone on our side of the fence believes passionately that it will be a continuing agenda".
Mr Flight said after an election had been won, "you can actually get on with what needs to be done".
'Nakedly political'
According to the newspaper, Mr Flight described the Tory proposal for pensioners' council tax rebates as "nakedly political".
He suggested further vote-winning promises were likely to include raising income tax and inheritance tax thresholds "so that Middle England comes out of the equation for the time being".
Mr Flight, first elected in 1997, is one of the most Eurosceptic members of the Conservative Parliamentary Party.
He has said he would never vote in favour of a single European currency and used to work for Norman Tebbit, sharing many of his mentor's views on Europe.