Michael Howard has moved to end Tories' sporadic financial problems through the creation of a new party foundation.

The new body, which will be overseen by a committee headed by Lord Hesketh, will raise money for the general election and manage a new long-term endowment fund.

To kick-start the fund, Howard announced that the £6 million which is likely to be raised by the sale of the party's Smith Square HQ is to be handed over as a "long lasting bequest".

The party's finances are said to have been significantly boosted since Howard's election.

Big party donors have turned on the taps which had run dry under Iain Duncan Smith's failed leadership.

It has been reported that over £2 million has been donated to the party since Howard's succession.

Speaking last night the new Conservative leader said he wanted the party to be put on a "sound footing for the long term".

"The asset of the freehold of 32 Smith Square is a great legacy from previous generations of Conservative leaders to our generation," he said on Thursday.

"I want the foundation to ensure that my successors also receive a long lasting bequest."

Earlier this week former Conservative treasurer Lord Ashcroft called on donors to open their wallets and back the new leadership.

He said that "big donors should act now" to help the party prepare for the next general election.