My potential successors are so talented, says PM: Cameron sings praises of Boris, May, Osborne and Gove as he dismisses leadership speculation

David Cameron last night sought to shrug off speculation about his leadership of the Tories – by hinting that any one of Boris Johnson, Theresa May, Michael Gove and George Osborne could succeed him.

The Prime Minister said he was surrounded by ‘talented people’ and did not want them to be ‘shrinking violets’.

Mr Cameron made his point after business and energy minister Michael Fallon, who is close to Downing Street, dropped a hint that Mrs May wants to lead the party. And the Home Secretary herself added fuel to the fire with a speech casting herself as the party’s new Iron Lady.

Nonplussed: The Prime Minister deflected speculation about potential rivals to his leadership saying he was surrounded by 'talented people'

Mrs May told colleagues pushing through unpopular cuts and reforms: ‘Whatever you do, don’t buckle.’ The Tories needed to do more to reassure voters about their motives, she said.

In an interview with Bloomberg last night, Mr Cameron was asked if he was worried he was presiding over a ‘beauty contest’ in which there was speculation about the ambitions of senior colleagues.

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He responded by praising Mrs May – along with the Chancellor, Education Secretary Mr Gove and London Mayor Mr Johnson.

He said: ‘I’ve given people their jobs, I’ve given people the tasks I want them to carry out and then I let them get on with the job. I look around the table and think, isn’t it great we’ve got this talent. I don’t want shrinking violets.’

On Mr Johnson, who has repeatedly refused to rule himself out as a future Tory leader, Mr Cameron said: ‘Boris is doing a great job, he has a lot more to give.’

Potential successors: Home secretary Theresa May, left, and London mayor Boris Johnson, right, have been strongly tipped to replace David Cameron as leader of the Conservative party

There was fresh speculation in the Commons yesterday over Mrs May’s ambitions as Labour MP John Spellar called on the Government do to more for the UK car industry.

He asked Mr Fallon: ‘Will he talk to the Home Secretary and get her to back British industry? It might even help her leadership ambitions.’

‘They may not need that much help,’ Mr Fallon replied, prompting gasps from MPs. Mrs May has been careful not to stray from her brief since speculation about her leadership ambitions earlier this year, and has repeatedly stressed her loyalty to Mr Cameron.

However, she is understood to regard Mr Johnson as ‘faintly ridiculous’ and is determined to prevent him becoming leader if the Tories lose the next election.

In a speech to the centre-Right think tank Reform, Mrs May – hailed as ‘Britain’s Angela Merkel’ by her allies – said the Conservatives’ mission had to extend further the elimination of the vast budget deficit left behind by Labour. She suggested the party leadership needed to do more to ‘reassure people about our motives and our values’ and to ‘go further opening up public services’.

Contenders: Education secretary Michael Gove, left, and the Chancellor George Osborne, right, were singled out as part of the 'talented' cabinet praised by David Cameron

She insisted it was possible to do ‘more for less’ across the public sector – highlighting welfare, defence and local government.

Mrs May also suggested the Government had to do more to stand up to vested interests in the private sector – particularly banks and big utilities.

She pointed out that her party had questioned the level of Labour’s public spending as long ago as the 2001 election campaign but ‘sadly our argument fell on deaf ears, and we all know what came next’.

The Home Secretary  said there was ‘no other way’ than fundamental reform of the public sector.

‘The task facing the Government in the next Parliament will be to maintain fiscal discipline and drive on with reform so that the debt and debt interest payments return to manageable levels,’ she said.

‘That will be a tough challenge, but we’re proving to the public that we can deal with the deficit, we can reduce spending, and we can do those things while not just protecting public services but even improving them.’