In a bid to put the latest bout of party in-fighting behind him, Iain Duncan Smith has launched a strong attack on Labour's record in government.

The Conservative leader accused Gordon Brown and Tony Blair of "squandering" the economic legacy left by previous administrations.

He said that higher taxes and over-regulation had led to "tough times" for British manufacturing companies, and faith in Labour was declining as a result.

"All the work they did in opposition to convince people to give them a chance, all the good-will they were given in their first four years in power, all the benefits of a strong economic inheritance are gone - squandered," he said.

Pointing to problems such as the pensions crisis, Duncan Smith said that "incompetence on this scale is extremely damaging".

"New Labour promised to be different. They pretended to be Conservative even," he said.

"But you can't be Conservative when your instincts are wrong. I believe we are witnessing the slow death of New Labour.

"This may be good news for those who were always suspicious of it - those on the Labour left who were prepared to keep quiet so long as they were in government.

"But it is bad news for the people of Britain who will be made to endure the pain. Because as Labour reverts to type things are not going to get any better."

He accused the government of being "on the take", with the national tax bill rising by £110 billion.

But the extra cash was not leading to improvements in public services, Duncan smith added, because in key areas like the NHS the required reforms are not yet in place.

"We are witnessing the death of New Labour, and the resurrection of Old Labour. The whole, hopeless cycle of tax-and-spend-and-fail," he said.

The Tory leader called on the country to say that "enough is enough" and pledged that a Conservative administration would slash red tape and stop "interfering" in business.

"Most importantly, because we are determined to spend your money more carefully, we will take a different approach to the public services," said Duncan Smith.

He also repeated his belief that "it is possible to have both lower taxes and better public services".

Rejecting Labour and Liberal Democrat suggestions that he wanted to "destroy" public services he argued that a strong economy would lead to stronger public services.

The speech came as the party sought to end the latest spat of party feuding.

Reports suggesting Theresa May is losing the confidence of Duncan Smith have been denied.

But the anonymous criticism of the party chairman was taken as another sign that right-wingers are pushing for an end to the "modernisation" agenda.

It followed a further row over the Conservative leader's sacking of Mark Macgregor from the post of chief executive.

He was replaced by right-winger Barry Legg, a former Maastricht rebel who also took on the position of Duncan Smith's chief of staff.

The changes prompted party heavyweight Michael Portillo to voice his first criticism of the Tory leader since his defeat in the 2001 leadership contest.

"My constituents are dismayed at another round of infighting which appears to have come from a clear blue sky and to be causing damage which is purely self inflicted," he told the Telegraph.