Iain Duncan Smith has suffered a blow after his hand-picked director of strategy walked out just weeks before the Conservative's party conference.

Dominic Cummings had only been in the job eight months when he quit, stressing that he wanted to pursue "other things outside politics".

For many people just about the only thing less popular than the euro is the Tory Party

Dominic Cummings

The 30-year-old had courted controversy since his appointment from the anti-euro organisation Business for Sterling, where he was campaign director.

His departure prompted Tory former minister Francis Maude to warn that unless the party delivered on its modernisation agenda it could risk its position being overtaken by the Liberal Democrats.

'Squabbling children'

Mr Cummings upset traditionalists earlier this year when he told The Independent the party should not take a prominent role in the campaign against the euro.

"The biggest potential threat to the pound's survival is the Conservative Party," he said. "For many people just about the only thing less popular than the euro is the Tory Party".

The comments were said to have enraged David Davis, the then party chairman, who was later moved from the job by Mr Duncan Smith.

Mr Cummings hopes to pursue other projects outside politics

Some attributed Mr Davis's demotion to his disagreements with Mr Cummings.

Last month former Tory chairman Lord Tebbit urged Mr Duncan Smith to sack Mr Cummings and Conservative chief executive Mark MacGregor, and called for the party to rid itself of "squabbling children" and "spotty youths".

Mr Cummings' departure, coming so quickly after chief of staff Jenny Unglass stepped down, is a setback to Mr Duncan Smith.

The pair were seen as modernisers and played an important role in developing the Tory leader's strategy of broadening the party's appeal by presenting them as the defenders of the vulnerable in society.

Fond farewell?

Mr Cummings said: "I am leaving to other things outside politics.

"There have been lots of good developments over the last eight months and I wish Iain and the party well for the future."

Dominic was a forthright, creative, very talented individual and I am sorry that he has left

Francis Maude

A party spokesman said: "Dominic Cummings has decided to leave Conservative Central Office. He has new projects that he wants to pursue.

"He has made a valuable contribution at Central Office, helping Iain Duncan Smith shape the post-election Conservative strategy."

Mr Maude said he was disappointed at the strategy director's departure.

Lib Dems threat

"Dominic was a forthright, creative, very talented individual and I am sorry that he has left," he told BBC Radio 4's the World At One (Wato) programme.

While he accepted that Mr Duncan Smith had set out on a path of modernisation, Mr Maude said: "I suspect Dominic has been a bit frustrated that there hasn't been the sort of momentum that I and others would like to see."

Mr Davis and Mr Cummings were said to be at odds

Mr Maude said the Tory Party had "no God given right" to assume it would maintain its position.

"While I don't particularly rate the Liberal Democrats or Charles Kennedy, I think they have made progress.

"We need to be serious about this. We need to be single minded. We need to understand that the country needs a modern Conservative Party, a contemporary Conservative Party."

Traditional choice

But in a swipe at Mr Maude and other modernising factions, including Michael Portillo and Kenneth Clarke, Lord Tebbit told Wato on Friday that Mr Duncan Smith should remember he was voted in to follow a traditional path.

"I think somebody needs to give a slap in the face to the people who have dedicated themselves to heading in the wrong direction," he said.

"Iain Duncan Smith should follow his instincts.

"And he should recall that he was elected by the Conservative Party on the basis that he was not of the Mr Maude School, not in the Portillo school, not in the Clarke school, but in the traditional school of the Conservative Party - they wanted to get back to it.

"Mr Maude thinks that's the way to lose elections - well he perhaps knows more about losing elections than I do - but certainly I think that what the party needs to do is to rally around its leader."

A new director of communications, who has yet to be appointed, will take over responsibility for advice on strategy.