By Nick Assinder BBC News Online political correspondent

Duncan Smith says the Tories must take the fight to Labour

Focusing her attack on rising council taxes under Labour, she said the poll would be fought on local issues.

And she insisted that, thanks to a good Tory performance when these elections were last held in 1999, even independent experts were only predicting small gains.

She dismissed suggestions she was deliberately underplaying the possible result.

And she brushed away the idea that leader Iain Duncan Smith was being kept away from the campaign for fear of turning voters off the Tories.

He was not at the launch, but would be at forthcoming events, she said.

In-fighting ignored

"But local elections are about local issues and these are about who people want to see running their local councils.

"The experts are talking about us making modest gains and we are saying the same thing," she said.

Earlier, Mr Duncan Smith said he would make his party leave infighting behind as the local election battle begins.

The May polls are seen as a key test for Mr Duncan Smith's leadership, coming in the wake of recent attacks from former cabinet minister Michael Portillo.

In an interview with BBC Two's Newsnight, Mr Duncan Smith insisted he would still be in his job by the time of the next general election.

I am going to lead this party through to the next general election and we are going to win it Iain Duncan Smith

Mr Duncan Smith said his party needed to focus on attacking Labour, and this year's record council tax rises are set to be a key plank in the Tory local election drive.

Local elections are to be held for most councils in England and some in Scotland too.

'Better services'

Speaking on Newsnight, Mr Duncan Smith stressed: "I am going to lead this party through to the next general election and we are going to win it. I have no question about that."

He insisted the public was not interested in the recent departures of officials from Tory headquarters.

Mr Duncan Smith said Conservative councils "cost less and deliver better services" and that is what a Tory government would do on a national scale.

Portillo has accused the Tory leadership of self-inflicting rows

But he refused to give any guarantee of lower taxes, arguing that he did not know what the level of Labour taxation would be in two years time.

"I am not going to give you things I am going to change in a year's time," he said.

On Thursday, Mrs May tried to steer away from suggestions that the elections were about the Tory leadership.

'Searching questions'

She insisted: "What we will be focusing on at the local elections is the local issues because these elections are about who runs councils better, who provides better services at lower cost.

"And all the evidence is that across the country that is Conservative councils," she told BBC Radio 4's Today programme.

Labour Chairman John Reid later said that every local council had received an above-inflation increase in their grants this year.

"The Tories are repeating the same old lies on council tax to try to hide their real agenda of a 20% cut in public spending across the board," he said.

Liberal Democrat spokesman Ed Davey predicted a gloomy campaign for the Tories, saying: "This will be the first election campaign in history where Conservative candidates run away from a leader's visit."

Shadow cabinet minister Tim Yeo is among those who have said the verdict on Mr Duncan Smith's leadership will come after the May polls.

'Give money back'

The party's election manifesto will be published on Friday, with Mr Duncan Smith launching a 'Give us our money back' campaign about council funding on Saturday.

One of the Newsnight audience of voters who turned their backs on the Tories in 1997, called on Mr Duncan Smith to "come down" on people who rock the party.

The Tory leader agreed, saying it was fine for people to diverge where they "passionately held" different views on "principled issues".

"What is not acceptable at the end of the day is that people with their own personal agendas play games to distract from the real message, which is attacking the Labour government for what they fail on," he said.

"The real leadership is on getting my party to focus on the job in hand."