Cameron is under pressure from a growing number of party legislators and activists who have broken ranks to say they are unhappy with his policies. The economy is stagnant, heading for a possible third recession in four years, and the Labour opposition holds a 10-point lead in opinion polls.

Interior minister Theresa May provoked media speculation she was aiming for Cameron’s job when she delivered a speech last week that went well beyond her brief.

“Anyone in this party who’s in any doubt who we should be fighting, what we should be debating, where our energies should be focused – I tell you: our battle is with Labour,” Cameron told party members at a rally in central London.

“This is a bunch of self-satisfied Labour socialists who think they can spend your money better than you can, make decisions better than you can and tell you what to do, and we should never, ever let that lot near government again.”

Half-way through a five-year term, many Conservative lawmakers are growing restless, fearful of defeat at the next national election and fed up with ruling in coalition with the smaller center-left Liberal Democrats.

Hit by the loss of Britain’s top-notch AAA credit rating in February, Conservative spirits were further depressed when the party was beaten into third place in a vote for a parliamentary seat that it needs to win in 2015 to rule alone without a coalition.

Speaking days before a closely watched budget statement, Cameron told activists to hold their nerve, invoking the memory of former Conservative leaders including Winston Churchill and Margaret Thatcher, saying the party was building an “aspiration nation”.

“We always knew we’d face pretty big challenges right now. It’s mid-term … We are recovering from the deepest recession since records began,” he said.

Perhaps mindful of how deeply the issue divides his party, Cameron made no mention of his support for gay marriage. Last month, half his legislators voted against government plans to extend the right to marry to homosexual couples.

Although Cameron spoke to applause, Conservative commentator Iain Dale said he would have to do more to win over doubters within the party as well as voters across the country.

“When you talk to a Conservative audience … you need to put a bit of red meat in there to get them going, and he didn’t really do that this morning,” Dale told BBC television.

(Editing by Mark Trevelyan)

Cameron is under pressure from a growing number of party legislators and activists who have broken ranks to say they are unhappy with his policies. The economy is stagnant, heading for a possible third recession in four years, and the Labour opposition holds a 10-point lead in opinion polls.

Home Secretary Theresa May provoked media speculation she was aiming for Cameron’s job when she delivered a speech last week that went well beyond her brief.

“Anyone in this party who’s in any doubt who we should be fighting, what we should be debating, where our energies should be focused – I tell you: our battle is with Labour,” Cameron told party members at a rally in central London.

“This is a bunch of self-satisfied Labour socialists who think they can spend your money better than you can, make decisions better than you can and tell you what to do, and we should never, ever let that lot near government again.”

Half-way through a five-year term, many Conservative MPs are growing restless, fearful of defeat at the next national election and fed up with ruling in coalition with the Lib Dems.

Hit by the loss of Britain’s top-notch AAA credit rating in February, Conservative spirits were further depressed when the party was beaten into third place in a vote for a parliamentary seat that it needs to win in 2015 to rule alone without a coalition.

Speaking days before a closely watched budget statement, Cameron told activists to hold their nerve, invoking the memory of former Conservative leaders including Winston Churchill and Margaret Thatcher, saying the party was building an “aspiration nation”.

“We always knew we’d face pretty big challenges right now. It’s mid-term … We are recovering from the deepest recession since records began,” he said.

Perhaps mindful of how deeply the issue divides his party, Cameron made no mention of his support for gay marriage. Last month, half his legislators voted against government plans to extend the right to marry to homosexual couples.

Although Cameron spoke to applause, Conservative commentator Iain Dale said he would have to do more to win over doubters within the party as well as voters across the country.

“When you talk to a Conservative audience … you need to put a bit of red meat in there to get them going, and he didn’t really do that this morning,” Dale told BBC television.

(Editing by Mark Trevelyan)

Shares in Trinity Mirror fell 21 percent, wiping over 60 million pounds ($90 million) off its value after police said they were looking into a suspected conspiracy at its Mirror Group between 2003 and 2004 to intercept telephone voicemails.

Revelations about journalists hacking mobile phones – not only those of celebrities and politicians, but also crime victims, including a murdered schoolgirl – caused public outrage that led to the closure in July 2011 of Murdoch’s News of the World – Britain’s largest circulation paper at the time.

A public inquiry into press standards led to calls for better regulation of the news media and embarrassed Britain’s political elite by revealing close relations between ruling politicians and newspaper editors and owners.

The issue is still a potentially dangerous one for Prime Minister David Cameron who had close ties to editors at the News of the World.

On Thursday he abruptly ended cross-party talks on press oversight and tabled a vote on light-touch rules, rather than the stronger legislation which some experts say is needed to curb media abuse – prompting allegations he is in thrall to the press barons.

Officers from the police’s hacking inquiry – known as Operation Weeting – arrested the Mirror Group journalists at their London homes on suspicion of conspiracy to intercept telephone communications.

Mirror Group Newspapers includes three national titles: the Daily Mirror, the Sunday Mirror and the Sunday People.

Those arrested on Thursday were: the People’s current editor James Scott and his deputy Nick Buckley, former Sunday Mirror editor Tina Weaver and former People editor Mark Thomas, Trinity Mirror Chief Executive Simon Fox told staff in an email, a source told Reuters.

Scott and Thomas are former deputy editors of the Sunday Mirror and Buckley was previously the paper’s head of news. Weaver left the company last May when the group merged its Daily Mirror and Sunday Mirror tabloids into a 7-day operation.

“We take any allegation against employees very seriously and are co-operating with the police on this matter,” Trinity Mirror said in a statement.

Trinity Mirror has previously said there was no evidence its journalists had hacked any phones.

But the group’s shares lost around 17 million pounds in value in October when a lawyer who handled many of the original phone-hacking cases filed legal claims against Trinity Mirror on behalf of four people, including the former England soccer manager Sven-Goran Eriksson.

Tens of people from Murdoch’s British tabloids have been arrested for hacking voice messages and for conspiring to make payments to public officials. ($1 = 0.6700 British pounds)

(Additional reporting by Kate Holton; Editing by Robin Pomeroy)

The coalition, led by Conservative Prime Minister David Cameron, has been hard on the Liberal Democrats, out of power for generations until its creation following an inconclusive national election in 2010.

Left-leaning voters have abandoned the party, arguing it has betrayed its core values. The breaking of a pledge to abolish university fees compounded the damage, cutting poll ratings by more than half the 22 percent gained in 2010.

A sex scandal over a former senior party figure and a court case involving a former minister have also dented its reputation.

A nationwide poll in the Observer newspaper on Sunday put the Lib Dems in fourth place on 8 percent, behind the right-leaning UKIP on 17 percent, Cameron’s Conservatives on 27 percent and opposition Labour on 39 percent.

But winning the seat for Eastleigh, southern England, has buoyed the Lib Dems and piled pressure on Cameron, whose party was beaten into a humiliating third by the anti-EU UKIP, which has no seats in central government.

Speaking at a party conference in the south coast city of Brighton, Clegg urged Lib Dems to seize the momentum and make their voices heard.

“I have spent nearly three years urging you to hold firm … to remain steady under fire,” Clegg said. “Today I have a different message for you – win. Get back out there. Tell our side of the story. And we will win again.”

AUSTERITY MEASURES

In a defiant message, Clegg highlighted his party’s determination to stick to the coalition’s austerity programme, blamed by the opposition Labour party for weakening an economy close to its third recession in four years.

“Countries around the world face the same, hard truth – we must all pay the piper in the end. I want to make one thing clear – we will not flinch on the deficit,” he said.

The conference comes after a difficult period for Clegg’s party. Former Liberal Democrat cabinet minister Chris Huhne resigned on February 4 after admitting covering up a speeding offence.

The sex scandal that has ensnared Chris Rennard, the party’s former chief executive, has also raised questions for Clegg about what he knew about it. Rennard denies the accusations.

But in Brighton, the mood was optimistic and officials believe that after the Eastleigh victory the tide has turned, and many expect that to be shown in local elections in May.

“For the first time in a generation we could campaign on our record of local delivery and our record of national delivery too,” Clegg said.

Observers were cautious about the party’s fortunes at the next election in 2015. A separate poll released at the weekend forecast the Lib Dems would lose more than half its 57 seats in the 650 seat parliament if a vote were held now.

“They are going to find it very hard at the next general election,” said Manchester University politics professor Andrew Russell. “There are some very high profile (Liberal Democrat)politicians who could be casualties. While they won’t be wiped out, they are going to find it very tough.”

(Editing by Maria Golovnina and Alison Williams)

Detectives from London’s police force will consider whether “criminal activity” took place relating to the allegations of sexual impropriety made against the party’s former chief executive Chris Rennard, the Metropolitan Police Service said.

Rennard, a member of parliament’s upper house, denies the allegations, but has stood down from party duties while they are investigated.

The furore comes at a difficult moment for the party following the resignation of a former cabinet minister Chris Huhne this month after he admitted asking his then wife to accept a penalty for a speeding offence he had committed.

A local election to replace Huhne takes place this Thursday, with the Lib Dems, below 10 percent in national opinion polls, fighting a close battle with their Conservative coalition partners for the seat.

The Lib Dems’ stumbling response to the reports that Rennard inappropriately touched female party members and activists several years ago has put it on the back foot since they emerged in a television news report last week.

Lib Dem President Tim Farron, in an apparent criticism of party leader Nick Clegg, said the party had “screwed this up”.

Conservative-supporting newspapers have leapt on the crisis, putting Clegg, who serves as deputy prime minister, on the spot after he appeared to change his position on when and how much he knew about the allegations.

The Daily Mail accused Clegg of a cover-up after he disclosed he had been aware of “indirect and non-specific concerns” about Rennard in 2008.

Clegg denied hushing up the matter, saying his chief of staff had gone to Rennard at the time to put the concerns to him along with the warning that such behaviour was “wholly unacceptable”.

“It is wrong … to suggest that we could have acted further given that we didn’t have specific allegations five years ago. We have them now. That’s why we will act,” Clegg told Sky News.

The party has now announced two internal inquiries, one into how the party handled the allegations, and another into the allegations themselves.

“We don’t want there to be any no-go areas. If there are things which are criminal they need to pursued,” party deputy leader Simon Hughes told Sky News.

(Editing by Andrew Heavens)

Detectives from London’s police force will consider whether “criminal activity” took place relating to the allegations of sexual impropriety made against the party’s former chief executive Chris Rennard, the Metropolitan Police Service said.

Rennard, a member of parliament’s upper house, denies the allegations, but has stood down from party duties while they are investigated.

The furore comes at a difficult moment for the party following the resignation of a former cabinet minister Chris Huhne this month after he admitted asking his then wife to accept a penalty for a speeding offence he had committed.

A local election to replace Huhne takes place this Thursday, with the Lib Dems, below 10 percent in national opinion polls, fighting a close battle with their Conservative coalition partners for the seat.

The Lib Dems’ stumbling response to the reports that Rennard inappropriately touched female party members and activists several years ago has put it on the back foot since they emerged in a television news report last week.

Lib Dem President Tim Farron, in an apparent criticism of party leader Nick Clegg, said the party had “screwed this up”.

Conservative-supporting newspapers have leapt on the crisis, putting Clegg, who serves as deputy prime minister, on the spot after he appeared to change his position on when and how much he knew about the allegations.

The Daily Mail accused Clegg of a cover-up after he disclosed he had been aware of “indirect and non-specific concerns” about Rennard in 2008.

Clegg denied hushing up the matter, saying his chief of staff had gone to Rennard at the time to put the concerns to him along with the warning that such behaviour was “wholly unacceptable”.

“It is wrong … to suggest that we could have acted further given that we didn’t have specific allegations five years ago. We have them now. That’s why we will act,” Clegg told Sky News.

The party has now announced two internal inquiries, one into how the party handled the allegations, and another into the allegations themselves.

“We don’t want there to be any no-go areas. If there are things which are criminal they need to pursued,” party deputy leader Simon Hughes told Sky News.

(Editing by Andrew Heavens)

Detectives from London’s police force will consider whether “criminal activity” took place relating to the allegations of sexual impropriety made against the party’s former chief executive Chris Rennard, the Metropolitan Police Service said.

Rennard, a member of parliament’s upper house, denies the allegations, but has stood down from party duties while they are investigated.

The furor comes at a difficult moment for the party following the resignation of a former cabinet minister Chris Huhne this month after he admitted asking his then wife to accept a penalty for a speeding offence he had committed.

A local election to replace Huhne takes place this Thursday, with the Liberal Democrats, below 10 percent in national opinion polls, fighting a close battle with their Conservative coalition partners for the seat.

The Liberal Democrats’ stumbling response to the reports that Rennard inappropriately touched female party members and activists several years ago has put it on the back foot since they emerged in a television news report last week.

Liberal Democrat President Tim Farron, in an apparent criticism of party leader Nick Clegg, said the party had “screwed this up”.

Conservative-supporting newspapers have leapt on the crisis, putting Clegg, who serves as deputy prime minister, on the spot after he appeared to change his position on when and how much he knew about the allegations.

The Daily Mail accused Clegg of a cover-up after he disclosed he had been aware of “indirect and non-specific concerns” about Rennard in 2008.

Clegg denied hushing up the matter, saying his chief of staff had gone to Rennard at the time to put the concerns to him along with the warning that such behavior was “wholly unacceptable”.

“It is wrong … to suggest that we could have acted further given that we didn’t have specific allegations five years ago. We have them now. That’s why we will act,” Clegg told Sky News.

The party has now announced two internal inquiries, one into how the party handled the allegations, and another into the allegations themselves.

“We don’t want there to be any no-go areas. If there are things which are criminal they need to pursued,” party deputy leader Simon Hughes told Sky News.

(Editing by Andrew Heavens)

Lurid headlines reveal a culinary gulf between distaste for
the notion of horsemeat in Britain and its status as a delicacy
elsewhere in Europe. But as governments play down the health
risks, a greater impact may stem from a shattering of public
confidence in EU systems of labelling and quality control
introduced after previous threats hit the human food chain.

As details emerge of a complex network of slaughterhouses
and middlemen standing between the farm and the supermarkets
across Europe, France and Britain have vowed to punish those
found responsible for selling horsemeat purporting to be beef.

With DNA tests needed to tell the two kinds of flesh apart,
retailers and makers of processed meals complain of being duped
by suppliers; one French firm has pointed a finger at Romania.

“This is a conspiracy against the public,” said British farm
minister Owen Paterson. “I’ve got an increasing feeling that it
is actually a case of an international criminal conspiracy.”

Prime Minister David Cameron has called it “very shocking”.

Adding to concerns are indications that some horsemeat,
perfectly edible in itself, may contain a drug known as bute – a
common, anti-inflammatory painkiller for sporting horses but
banned for animals intended for eventual human consumption.

Britain’s Food Standards Agency said it was checking whether
horse carcasses exported from Britain contained phenylbutazone.
It said five such animals were sold abroad last year and it had
told foreign agencies. French media said the horses went there.

One firm hit by the British horsemeat scandal, frozen foods
group Findus, said it was recalling its beef lasagne product
after discovering they included horsemeat. Its French supplier,
Comigel, said the questionable meat came from EU member Romania.

An EU-wide alert has been sent out and governments debated
how to bring the increasingly complex industry under control.

Food experts say globalisation has brought benefits to food
supply, with exotic items now available from around the world
all year round, but it has also created a system that is so
complex it has increased the risks of adulteration, whether by
design, to use cheaper inputs, or through neglect of standards.

The “mad cow” crisis, which saw British beef banned in the
EU in the 1990s over fears of a degenerative brain disease, left
a legacy of tight controls on the identity of European animals,
intended to ensure the origins of fresh meat are traceable.

But in meat minced into processed product, while hygiene
checks are the norm, testing for something as seemingly basic as
which species it came from is complex and not widely undertaken.

Mystery over the contents of a sausage is far from new, but
mass production means any problem can escalate rapidly:

“Food adulteration has been going on for as long as it has
been prepared, for thousands of years,” said Chris Elliot, a
professor working on food safety at Queen’s University Belfast.

“We are at the stage now where whenever this adulteration
happens, it tends to happen on a very large scale, extremely
well organised.”

REPULSED

Doubts over quality controls in processed food could damage
sales across Europe, but the greatest impact of this scandal may
be in Britain, where assurances that horsemeat is safe have done
little to lessen the disgust felt by many, or suspicions that it
reflects another unpopular aspect of membership of the EU bloc.

One leading British lawmaker called for a ban on EU imports.

“Nabbed, stabbed and beaten: wild horses to go in our beef,”
ran the headline on Sunday’s mass-selling Sun newspaper over a
story alleging cruelty to horses to be slaughtered in Romania.

From Queen Elizabeth downwards, Britons cast themselves as a
nation of horse lovers, treating sporting thoroughbreds with no
less reverence than human athletes and viewing the species as
whole with an affection rivaled only by that for the family dog.

There are only a handful of licensed horse abattoirs in
Britain, and these mostly export carcasses to the continent,
where Italy leads consumption tables with an unsentimental taste
for both horse and donkey; horsemeat also has a niche in the
cuisine of France and of many other European nations.

At a Sunday market in north London, where shoppers strolled
among rain-soaked stalls selling vegetables, sausage and cheeses
direct from the small farms that produce them, many said they
would buy fewer frozen ready-meals after the revelations.

That is good news for the likes of Amie Peters, who runs a
family beef burger business: “They’ve kept it secret from
everyone. It was concealed from the public. That’s not nice,”
she said of equine DNA found in supermarket burgers, nodding to
her own grill and adding with a smile: “No horsemeat in these.”

Distaste for horsemeat is widely shared across the
English-speaking world, although the U.S. Congress in 2011
overturned a five-year-old effective ban on slaughtering horses
for food.

TRACING BACK

Tracing processed meat back to its source is difficult in
Europe’s complex market, and the path from abattoirs where cows
and horses are slaughtered and minced to people’s dinner tables
often meanders through a confusing chain of middle companies.

Last week’s problems for Findus came less than a month after
British supermarket Tesco and fast food outlet Burger
King found horsemeat in beef burgers from Ireland.

French officials tracing the contamination of the Findus
beef lasagne said a Luxembourg factory had been supplied by the
French firm Poujol, which had bought the meat frozen from a
Cypriot trader, who in turn had subcontracted the order to a
Dutch trader supplied by a Romanian abattoir.

However, Comigel, a frozen foods producer based in eastern
France, told a newspaper it had bought the meat from another
French company, supplied from a Romanian abattoir.

In Romania, officials said one of the two Romanian abattoirs
suspected to have provided horsemeat had been cleared of all
suspicion: “I believe that, even though the investigation isn’t
finished, that everything left the country properly and
officially,” Constantin Savu of Romania’s food safety authority
was quoted as saying by state news agency Agerpres on Sunday.

“I find it hard to believe that such errors could exist.”

In France, six big retailers said they were recalling
lasagne and other products suspected to be mislabelled.

Britain’s Paterson summoned leading food retailers and
representatives of food processors to an emergency meeting at
his office at the weekend to discuss the crisis.

Anne McIntosh, who chairs the parliamentary food and
environment committee, called for a temporary import ban on
processed and frozen meats from the other 26 EU states.

“My concern is that consumer confidence will have collapsed
across the European Union,” McIntosh, from Cameron’s
Conservative party, told the BBC on Sunday.

“We seem to be no clearer as to what the source of this
contamination is, or whether the supply was ever destined for
human consumption. Is this a fraud of such a massive scale that
it should never have entered the human food chains?”

(Additional reporting by Luiza Ilie in Bucharest and Leigh
Thomas in Paris; Writing by Maria Golovnina; Editing by Alastair
Macdonald)

French Consumer Affairs Minister Benoit Hamon said an
investigation had found that the horsemeat had originated in
Romania, although there were links with French, Dutch and
Cypriot firms and a factory in Luxembourg.

British environment minister Owen Paterson said more cases
of contaminated food could emerge as British retailers conducted
tests for horsemeat on processed beef products. The scandal
threatens to affect consumer confidence in Europe’s giant food
industry, with pressure rising for greater checks.

The British unit of frozen foods group Findus
began a recall this week of its beef lasagne from retailers on
advice from its French supplier, Comigel, over concerns that
some packs contained high levels of horsemeat.

Findus France said it too had recalled lasagne and two other
products after discovering that they included horsemeat from
Romania rather than beef from France as it had thought.

Hamon said an EU-wide alert had been sent out and that it
was not yet clear whether there had been an intentional fraud or
the meat had been sold as beef by accident.

“I can assure you that, whether it’s a question of
negligence or direct responsibility, there will be sanctions,”
Hamon said on iTele television.

LEGAL COMPLAINT

Findus France Director General Matthieu Lambeaux said in a
statement the company would file a legal complaint on Monday.

“We thought we had certified French beef in our products.
But in reality, we were supplied with Romanian horsemeat. We
have been deceived,” Lambeaux said.

Hamon said a Luxembourg factory had been supplied by the
French firm Poujol, which had bought the meat frozen from a
Cypriot trader, who in turn sub-contracted the order to a Dutch
trader supplied by a Romanian abattoir.

However, Findus’s supplier Comigel, a frozen foods producer
based in eastern France, told a newspaper it had bought the meat
from another French company, supplied from a Romanian abattoir.

In Britain Findus said it believed the contamination was
deliberate.

“The early results from Findus UK’s internal investigation
strongly suggests that the horsemeat contamination in beef
lasagne was not accidental,” it said.

Findus’s product recall was followed in Britain by
supermarket chain Aldi, which withdrew two frozen beef products
supplied by Comigel after they tested positive for horsemeat.

Paterson summoned Britain’s leading food retailers and
representatives of food processors to an emergency meeting at
his office in London on Saturday to discuss the crisis.

He said participants were determined to get to the bottom of
a scandal which he said was either caused by “gross incompetence
or what I suspect is an international criminal conspiracy”.

Britain’s government is under pressure to appear on top of
the scandal, which comes less than a month after supermarket
chain Tesco and fast food outlet Burger King
found horsemeat in beef burgers from an Irish supplier.

Britons generally do not eat horsemeat, regarding its
consumption as a quirk of French appetites. However, the meat
has also fallen out of favour with consumers in France.

French Consumer Affairs Minister Benoit Hamon said an investigation had found that the horsemeat had originated in Romania, although there were links with French, Dutch and Cypriot firms and a factory in Luxembourg.

British environment minister Owen Paterson said more cases of contaminated food could emerge as British retailers conducted tests for horsemeat on processed beef products. The scandal threatens to affect consumer confidence in Europe’s giant food industry, with pressure rising for greater checks.

The British unit of frozen foods group Findus began a recall this week of its beef lasagne from retailers on advice from its French supplier, Comigel, over concerns that some packs contained high levels of horsemeat.

Findus France said it too had recalled lasagne and two other products after discovering that they included horsemeat from Romania rather than beef from France as it had thought.

Hamon said an EU-wide alert had been sent out and that it was not yet clear whether there had been an intentional fraud or the meat had been sold as beef by accident.

“I can assure you that, whether it’s a question of negligence or direct responsibility, there will be sanctions,” Hamon said on iTele television.

LEGAL COMPLAINT

Findus France Director General Matthieu Lambeaux said in a statement the company would file a legal complaint on Monday.

“We thought we had certified French beef in our products. But in reality, we were supplied with Romanian horsemeat. We have been deceived,” Lambeaux said.

Hamon said a Luxembourg factory had been supplied by the French firm Poujol, which had bought the meat frozen from a Cypriot trader, who in turn sub-contracted the order to a Dutch trader supplied by a Romanian abattoir.

However, Findus’s supplier Comigel, a frozen foods producer based in eastern France, told a newspaper it had bought the meat from another French company, supplied from a Romanian abattoir.

In Britain Findus said it believed the contamination was deliberate.

“The early results from Findus UK’s internal investigation strongly suggests that the horsemeat contamination in beef lasagne was not accidental,” it said.

Findus’s product recall was followed in Britain by supermarket chain Aldi, which withdrew two frozen beef products supplied by Comigel after they tested positive for horsemeat.

Paterson summoned Britain’s leading food retailers and representatives of food processors to an emergency meeting at his office in London on Saturday to discuss the crisis.

He said participants were determined to get to the bottom of a scandal which he said was either caused by “gross incompetence or what I suspect is an international criminal conspiracy”.

Britain’s government is under pressure to appear on top of the scandal, which comes less than a month after supermarket chain Tesco and fast food outlet Burger King found horsemeat in beef burgers from an Irish supplier.

Britons generally do not eat horsemeat, regarding its consumption as a quirk of French appetites. However, the meat has also fallen out of favor with consumers in France.

(Additional reporting by Chine Labbe in Paris; Editing by Stephen Powell)