George Osborne the winner as Tory schools feud unravels

No senior Conservative has had a better weekend than George Osborne. Not only has he seen Theresa May, his main rival for the leadership of the party (should David Cameron fall under the proverbial bus) have her wings clipped, but he's also received a fulsome mea culpa from IMF chief executive Christine Lagarde.

The Home Secretary has not come well out of the very public spat with Education Secretary Michael Gove over who is to blame for allowing Islamic fundamentalism to grow in Birmingham schools.

May has been ordered by the Prime Minister to jettison her special adviser, Fiona Cunningham, for posting an internal letter from May to Gove on the Home Office website in breach of the code of conduct for ministers which says such advice should remain private. (It has been wiped from the government internet portal but it still survives on the Google cache, until they are ordered to bin it.)

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Meanwhile, Labour are putting the pressure on a vulnerable May: Yvette Cooper went on yesterday's Andrew Marr Show to say the Home Secretary still has questions to answer, and today Keith Vaz, Labour chairman of the Home Affairs Select Committee, has announced that he intends to call May and Cunningham before the committee to explain themselves.

Yet only a week ago, May came top of a ConservativeHome poll asking Tory members who they felt should be the next leader after Cameron.

Gove, a supporter of Osborne for the future party leadership, comes out of the row strengthened in contrast to May. Today he will emphasise that he has the Prime Minister’s backing for the tough measures he is to outline in a Commons statement for tackling Islamic fundamentalism in Birmingham schools.

While Ofsted found no evidence of a so-called Trojan Horse plot to take over the schools – there was "no smoking gun", as the BBC's political editor Nick Robinson put it on the Today programme – it did find that some schools, after being given 24 hours' notice of an Ofsted visit, swiftly changed the timetable to insert a lesson on Christianity.

As a result, Gove will announce that five schools are to be placed in special measures, and governors could face the sack over the "cover-up". And Gove feels vindicated in warning that much stronger action on extremist ideology was required by the Home Office.

Gove, an unreconstructed neo-con, began this spat by going back to The Times, where he used to work as a journalist, to brief his former pals off-the-record on May’s failure to take a tougher line.

As for George Osborne, his stock within the Tory party could hardly be higher right now. He is credited with sticking through thick and thin to his deficit reduction plan (it is now repeated by Tory MPs like a mantra) and if the Conservatives, against the odds, should win the next election, the Chancellor will get all the credit.

Yesterday, Christine Lagarde, appearing on the Marr Show, made it clear that the IMF's chief economist, Olivier Blanchard, had been wrong to warn in April 2013 that Osborne was "playing with fire" while she herself had told Osborne to rethink his austerity plan.

Lagarde said the IMF had "underestimated" UK growth and that its forecast had been "proven wrong by the reality of economic developments".

“Do I have to go on my knees?” asked Lagarde. “We got it wrong."