"The Conservative leadership would aim to push through an emergency budget, including spending cuts and a possible rise in VAT, with the support of the Liberal Democrats if David Cameron fails to secure an overall majority in the Commons at the general election.
"The revelation that senior Tories see the Lib Dems as their natural partners comes on the eve of Cameron's final party conference speech before the election in which he will declare he is "ready to be tested" as prime minister.
"He will draw on biblical references to offer a more positive vision to the nation after the dire warnings on the state of the nation's finances, saying: "There is a steep climb ahead, but the view from the summit will be worth it."
"Despite the optimism in Cameron's speech today, it is also clear that the Tory high command is looking at tax rises to fill the gap in the nation's finances. Senior Tories freely admit that the measures announced in shadow chancellor George Osborne's speech on Tuesday will only make a dent in the fiscal deficit."