The Conservatives have launched their local election campaign with a warning that they expect to see few gains for Iain Duncan Smith.

The party chairman Theresa May unveiled the first punches in her local election battle with a "virtual poster" and a pledge to challenge the government over the hike in council tax charges.

May was keen to talk down the party's chances, saying she would be happy with 30 net gains. "The last time most of these seats were up for election we made massive gains, so we are actually starting from a very high base, and that is one of the reasons why we are predicting only modest gains," she told the BBC.

"It is not just us that is predicting modest gains for ourselves. The academics who have looked at the evidence are also predicting modest gains.

"This isn't just something the Conservative Party is saying to play some sort of game.''

Speaking ahead of the e-campaign launch, May said: "The 2003 local elections will be the biggest set of elections in this parliament."

"The Conservative Party's campaign will focus on how Conservative councils deliver results in the best interest of their community.

"We will prove that Conservative councillors listen to local issues and concerns and follow them through with local action."

Ahead of the party's local government conference tomorrow, May also delivered an online video message and launched a new internet campaign on council tax.