Former leadership challenger Mr Clarke said the party should stop talking about the Tory leadership - as a shadow cabinet minister suggested he should be back on the Tory frontbench.

But at a conference fringe meeting, the ex-cabinet minister said getting public borrowing and spending under control had to come ahead of cutting taxes.

He also criticised Tory calls for a referendum on the draft European constitution - urging the party to wait until the final text was agreed before judging the issue.

We will not make progress if factions are plotting... I agree that we have at this conference to get off the agenda of leadership Kenneth Clarke Analysis: A dream ticket

Mr Clarke appeared alongside shadow deputy prime minister David Davis at the Independent fringe debate about how the Conservatives can win at the polls.

Responding to questions, Mr Davis said: "I would like to see Kenneth Clarke back in the shadow cabinet, frankly."

But Mr Clarke said he would be wary of such a move, pointing out his differences with some of the current policies and questioning whether he would have a real voice say in forming new ideas.

With talk of leadership plots in Monday's newspaper headlines, representatives and journalists packed the hall to see the two challengers defeated by Mr Duncan Smith.

Mr Clarke asked: "How do we get us out of this sense of crisis that other people are trying to wish upon us?

"I think the way out of this particular problem is to get ourselves a platform to get policies that give people the sense we are credible."

He said factions damaged both governments and opposition parties.

"We will not make progress if factions are plotting... I agree that we have at this conference to get off the agenda of leadership."

Tax priorities

Mr Duncan Smith has said the Tories' "absolute plan" is to cut taxes after the next election.

But Mr Clarke said the first priority of whoever succeeded Chancellor Gordon Brown was "to get spending and borrowing under control".

"The first thing to do is produce a stable economic situation and do so without damaging public services," he said.

"Tax cuts come after that. Tax cuts come when you've got public spending and borrowing under control."

The Tories have also promised to abolish all centrally imposed targets in the health service as part of their attack on Labour centralisation.

Mr Clarke lambasted the government's "micro management" of public services but urged his party not to "go to the other extreme" as some central targets were needed to maintain national standards.

Europe

He said he was also surprised by the calls for a referendum on the draft European constitution, which is now being negotiated in Rome.

He had thought the Tories had always favoured the European enlargement which made the treaty necessary and said people should wait for the final text. If it kept British powers over defence, foreign policy and taxation, he might be persuaded to back the constitution.

"I do not know what the alternative is," Mr Clarke continued. "If you are going to vote no whatever the outcome of the text is, I don't know what you are going to do. Are you going to leave? I'm not sure."

Trust

The Tory leadership insists it has not plans to withdraw from the EU, and Mr Davis won loud applause from activists as he renewed the demand for the British people to have a say on the draft constitution.

Mr Davis pointed to the "complete collapse in trust in Tony Blair".

And he stressed the need to win urban seats: "We cannot win in the countryside."

He accused commentators of taking a "very untutored approach" when they asked what services would be cut when taxes were reduced.

Instead, lower taxes could produce the economic growth enabling both more tax cuts and investment in public services, he argued.