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The Conservative Party has parted company with advertising agency

Yellow M following last week's disastrous general election that saw

Labour romp to a second successive landslide victory.

Yellow M and Conservative Central Office confirmed yesterday that they

would no longer be working together following the termination of the

contract last week.

The Tories are likely to hold talks with agencies later this year over

the advertising business for next year's local elections in London,

while an appointment for the next general election is unlikely to take

place until around 2004.

Referring to the impending battle for leadership of the party following

William Hague's resignation, a Tory spokesman said it would look at

future advertising arrangements "once more pressing issues have been

resolved".

But he insisted Conservative campaign strategy managers, including party

chairman Michael Ancram and shadow Cabinet Office minister Andrew

Lansley, had been happy with Yellow M's work during the election

campaign. "We are certainly not laying the blame for the defeat at its

door," he said.

The Tory ads contrasted Labour and Conservative policies on

taxation.

Posters included 'Are You One of Labour's Targets?' and 'Not All Parties

Are The Same'.

Yellow M Edinburgh managing director Ian Wright insisted the agency's

relationship with the Tories had always been scheduled to end on June 7.

However, he refused to comment on the rumours about a split between the

agency and party leader William Hague over campaign strategy.

Critics have suggested that the Tories' focus on taxation and Europe

neglected voters' concerns about the state of public services.

Meanwhile, Labour's ad agency, TBWA/London, this week celebrated

Labour's landslide victory by distributing brochures boasting 'Tony

Blair Wins Again'.