Conservative Party chairman David Davis has rubbished a report that Iain Duncan Smith will take a back seat in any future referendum campaign on the euro.

According to the Conservatives' director of strategy, Dominic Cummings, the Tories pose the greatest threat to the pound's survival.

If there's a referendum, then the Tories will have a place in the coalition but won't define the coalition

Dominic Cummings Conservative official

In an interview he argued that the unpopularity of the Conservatives could rub off damaging the No campaign.

But that prompted Mr Davis to say that the notion was "just plumb wrong".

"Be very clear on this - we will be in the frontline of this battle when it comes and I believe we will win it," he told BBC Radio 4's World at One programme.

But Mr Cummings told the Independent newspaper that there was a risk the pound could be destroyed "for many people, just about the only thing less popular than the euro is the Tory party".

No leading role

Mr Cummings, former head of the anti-euro No Campaign, said the Tories would enter into a debate on the single-currency but not be defined by it.

But he said the party would be part of an alliance against British euro entry.

Under Mr Duncan Smith's leadership the euro has barely been mentioned and he will continue this strategy, Mr Cummings said.

Cummings: Tories must back off euro debate

He will reject calls from Eurosceptics to launch a drive to 'save the pound' in the autumn.

Mr Cummings said: "We have to talk about it [the euro] in a way that speaks to the whole nation...

"If there's a referendum, then the Tories will have a place in the coalition but won't define the coalition. That is the crucial distinction.

Blair's dilemma

"The good thing about this battle is that it's all in our own hands...

"Blair can only win if we completely balls it up. I'm more confident than ever that the Tory party will change and that Blair will back off from a referendum he won't be able to win."

Tony Blair's recent enthusiastic comments about the euro have prompted speculation that a referendum could be held next year.

Any new Conservative strategy on the euro would come after the party's 'seven days to save the pound' campaign in last year's general election.

That drive led to accusations that the party was obsessed by the issue and Mr Duncan Smith has instead pledged to focus on how to improve schools and hospitals.

But former Tory frontbencher Ann Widdecombe said: "During the last general election people did share our view on the euro.

She added: "I can't see why we would lose the biggest opportunity we have had in years to work with public opinion for the public and to take a really big leading role."

Tory 'new realism'

Mr Cummings said: "If the Conservative Party were to define the anti-euro campaign, and articulate its message as it has in the past, then Blair has a real opportunity to win a referendum."

He added: "Blair's belief that the euro campaign is winnable has long been predicated on the hunch that the Conservative Party would take over the anti-euro campaign and destroy it."

Mr Cummings insisted there is a 'new realism' among Conservatives.

George Eustice says the No Campaign will shun the 'political elite'

He said the Tory leader, whose new tactic may alarm many MPs who supported him because of his Eurosceptic views, now wants to spell out how the Tories can make Britain better.

"We'll talk about the euro of course, but that is different from being obsessive about it," he said.

"We won't define ourselves by our opposition, or define the opposition by ourselves.

"The issue is far greater than any political party."

Those remarks were welcomed by George Eustice, campaign director of the No Campaign.

He said: "The Conservative Party will certainly play a role in any anti-euro campaign, but they will be one part of a broad coalition that connects with every level of society."