Northern Rock helped, but now the shadow chancellor is stepping up plans to court the City.

The Conservatives are not counting on Northern Rock damaging the government in the voters' eyes. "A week after Black Wednesday in 1993 the Tories were on 37 per cent, which is more than we are on now, around 34 per cent," recalls a member of the early-Nineties Tory front bench. Wait, he advised. "The government will become unpopular once things start slowing down, and Northern Rock will be a symbol of that. It will make a nonsense of Brown's repeated claim of 'No more boom and bust'."

A member of the shadow chancellor George Osborne's team says: "We have no idea why Northern Rock dragged on so long. One theory is that Gordon Brown was reluctant to act when he had an election planned. Another is that he was too frightened of the public reaction to Richard Branson taking control and making a financial killing. But if he had done, so what?"

Brown's former adviser Charlie Whelan agrees. He wrote recently that at least Branson is a wacky-jumpered businessman recognisable to the people, not some pinstriped, faceless name. But obviously Whelan didn't pass his advice on.

At first, there was confusion as to what the Conservatives would do in the same situation. But the shadow Treasury chief secretary, Philip Hammond, made the fair comment that under a Conservative government the fiasco would not have been allowed to get this bad in the first place.

The shadow Treasury team is aware that the combination of Northern Rock and the proposed tax on non-domiciles has damaged the repu tation of the City. Says an Osborne staffer: "This morning the Houston Chronicle said that the British financial climate is unstable. It's a red flag when the regional foreign press is mocking the UK. Gordon's to blame."

The Osborne team are taking a responsible approach to the Rock mess; after all, it could be something they inherit in two years. They know their figures and talk with passion about "Brown needlessly letting the £55bn turn into £110bn. He dithers, and the taxpayers cough up."

Osborne is making a conscious effort to court the City. This has been going on for a while now, since his time as shadow chancellor under Michael Howard. A member of his team is keen to point out that this is no prawn-cocktail, cheque-collecting offensive. "His trips are frequent and the objective is that both sides benefit." A series of events has involved the Conservative City Circle, which is becoming quite the thing.

Set up in 2004, CCC's aim is for business to become familiar with the Tories, contribute on policy, be briefed on strategy and meet shadow ministers. Richard Spring MP, a perfectly named man whose energy knows no bounds, is co-chairman of CCC. He says: "The City is hugely important to the success of the country. Should we win an election, we are prepared."

Committees covering specialised areas such as asset management, private equity and accounting have been formed for round-table discussions. This has provided MPs and members with a number of "go-to people".

The parties, helped along by champagne and canapés, are usually at the Grange City Hotel near the Tower of London. They are not intimate soirées. A regular attender is quite upbeat.

"It's a mixed bag, but it's the City, so it's very 'suity'," he says. "The older former cabinet ministers who now sit on the boards of big companies swagger around and thump a lot of beau tifully tailored backs, but the younger shad cab look a bit lost out of Westminster."

The next shindig is booked for May and the hotel is expecting between 800 and 1,000 people. At the CCC for younger Tories, called City Future, thrusting young people can network, exchange views and possibly sleep with each other. With the unsociable, long hours, it must be helpful to know that someone shares at least some of your politics before you attempt lacklustre, City-boy sex. You either: a) find a wife or b) lose your favourite Links cufflinks.

There is definitely a sense that business is interested in the party. These are careful people who hedge their bets for a living: they are not taking any chances with not laying the foundations should the Conservatives win the next election. Mervyn Davies, a business adviser to Gordon Brown, was at the smart Tory Black and White ball on 6 February. Although many complained that the ticket prices (£450 a head) made the occasion rather "corporate and soulless", organisers were pleased that the big hitters with influence and money were showing interest. Another Black and White reveller was the group chief executive of Lloyds TSB, Eric Daniels. Yes, the Lloyds TSB that held takeover talks with the crumbling Northern Rock in August.

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