The Conservatives have formed an alliance with the pro-European opposition party in Germany to plot a return to power.

Senior envoys from the Tories and the German Christian Democrats have agreed to set up joint policy groups on education, health and pensions.

The first formal meetings are due to take place at the Republican Party convention in New York this month.

Party chairman Liam Fox, who will be attending the convention, said: "Parties on the right have to start to co-operate in the same way as the Blairite third way parties have done."