Thatcher backs the pound

Baroness Thatcher: New Labour is "artificial"

Lady Thatcher has plunged the Conservative party into fresh controversy over Europe - by saying she would never scrap the pound.

This is at odds with official Tory policy - which is to rule out entry into the euro for just one parliament.

Prime Minister Tony Blair entered the fray by saying that the era of Thatcherism was over.

At the same time, a poll by ICM, for Wednesday's Guardian, suggests the first sign of hope for the Tories, with Labour's lead cut 2% to 13% from a week earlier. The Liberal Democrats are up 1% to 17%.

The poll suggests that John Prescott's approval ratings have slipped among Labour supporters - from 27% to 11%. Among all voters it stood at minus 11%.

Meanwhile Labour was embroiled in a row with the broadcast media after its general secretary, Margaret McDonagh, wrote to the BBC, ITN and Sky about their methods of operating.

There's a residue of socialism in Mr Blair; he can't rid himself of that, because it's perhaps in his bloodstream

Lady Thatcher in the Daily Mail

The letter spoke of "growing evidence that broadcasters had been inciting and colluding with protesters at campaign visits by senior politicians".

But the BBC defended its action in taking a protester to meet the prime minister in Norfolk last Friday.

Organic smallholder Brian Baxter said although the BBC gave him a lift to King's Lynn and fitted him with a microphone, any idea of collusion was "absolute nonsense".

"In his bloodstream"

In her speech at a Tory rally in Plymouth, Lady Thatcher said she would never scrap the pound.

She said of Labour: "They think that they can remove Britain's sovereignty - just as they put up Britain's taxes - by stealth.

"They are wrong. But they are too arrogant and too remote to know it.

Protesters raised concerns about job cuts if the Tories were elected

"So a mighty burden rests on us. We have 16 days to shift opinion, and to shake this rotten government to the core.

"That is our task."

But Mr Blair hit back during a speech at a middle school in Wimbledon, London, saying there was much that the Tories had got wrong in the 1980s.

"They were indifferent to social division. If you were unemployed it was tough luck.

"That wasn't the right way to run the country. We were wasting the talent of literally millions of people," he said.

'Relaxed too soon'

An issue which has been notably absent from the election has been raised once again - the spread of foot-and-mouth disease.

Shadow agriculture minister Tim Yeo went on the offensive over a fresh outbreak in North Yorkshire.

He told the BBC: "Once again Labour ignored the lessons of the 1967 outbreak when measures were relaxed a bit too soon and the disease flared up."

But Prime Minister Tony Blair defended the government's actions.

He said he had warned against complacency as the disease receded.

Ffion Hague watches as her husband makes a speech

Meanwhile, the party leaders have been doing their best to hammer home their policies.

The Lib Dems drew attention to their work in the Scottish Parliament and Welsh Assembly to back their claim to be able to make a difference in government.

Leader Charles Kennedy said his party now had "more representation and more power" than at any time since the days of Lloyd George.

The Tories, by contrast, were "the weakest opposition for more than 100 years", he said.

Charles Kennedy: Visited a student cafe in Cardiff

In a webcast for BBC News Online, William Hague said the Tories would stop "the great racket" and "trade in human beings" that was causing chaos in the asylum system.

Shadow chancellor Michael Portillo launched the Tories' manifesto for pensions, saying it was based on promoting "dignity" for older people.

Labour chose to focus on health, with a proposal to launch an NHS university to boost the skills of 100,000 health staff.

Both the prime minister and Chancellor Gordon Brown refused to be drawn on whether Labour would raise national insurance.

Mr Brown told the BBC: "What I am saying is that there will be no 50% tax rate and these Tory claims, like their claims about a £6 gallon of petrol, are a typical Tory election smear.

"These are smears that the Conservative Party know are not true as they make them."