Challenge to Thatcher over helicopter deal gathers strength. Ex-defense chief adroitly uses media in challenging government

The Heseltine factor has become the single most intriguing political challenge to Prime Minister Margaret Thatcher from within her own Conservative Party since she assumed office in 1979. Until now, she has made short shrift of those who dared to take her on. But the challenge posed by Michael Heseltine, now former defense minister, is a more serious matter. Mr. Heseltine stormed out of a Cabinet meeting last week in protest of a decision that curbed his freedom to speak out for a European solution to the financially troubled Westland helicopter company.

Since he left he has been adroit in challenging the government's contention that it had adopted a hands-off attitude between rival bids from American-led Sikorsky-Fiat and a five-string European consortium, and adroit in attracting publicity as well.

His high profile in the media since resigning has put the government on the defensive, and rattled many Conservative members of Parliament who see the need to rally to the government's defense.

Heseltine's exploitation of the media moreover has aroused suspicion among critics that he is just as concerned with defending his pro-European solution in the Westland controversy as he is with forwarding his own political ambitions.

A recent Harris poll conducted after his dramatic resignation shows that among the public, Heseltine has become the favorite to succeed Mrs. Thatcher. Sixty-three percent among those polled thought he was right to resign.

The government's embarrassment at the media play has been heightened by the inept performance in the House of Commons by the secretary of trade and industry, Leon Brittan. Mr. Brittan has been Heseltine's chief rival over the Westland issue.

Brittan has been under pressure to resign for denying he knew a member of the government had received a letter from British Aerospace (part of the European consortium) and then having to retract his statement.

The confidential letter to the prime minister from British Aerospace took on critical importance because of an earlier charge by Heseltine. He accused Brittan of telling British Aerospace executives that support of the European bid was unpatriotic. Heseltine cites this to demonstrate that, far from being neutral, as the government insists, it was pushing the US bid. A decision by Westland shareholders for its financial rescue was scheduled for yesterday, but the drama of recent days forced an adjournment until Friday.

Brittan claims his remarks to British Aerospace officials were only intended to alert them to the danger that backing for the European option could harm British Aerospace in its US market.

Political observers say Heseltine's future depends on the outcome of these developments:

The first hurdle will be the Sikorsky bid on Friday. He has attached himself so firmly to the European option that he could be vindicated if Westland fails to secure the 75 percent vote needed from its shareholders for the board-recommended Sikorsky bid. A Sikorsky triumph would be damaging to Heseltine.

The second hurdle would be capitalizing on an impression that is already manifesting itself: that Thatcher's strong personality does not fit the mood of Britain.

The third hurdle would be turning any disillusionment within the Conservative Party with Thatcher's monetarist, market-economy, pro-American policies to his advantage. If the party moves to the left with greater concern for the inner cities, favors closer ties with Europe, and adopts more interventionist policies, then Heseltine's credentials may start to look very attractive.

The conventional political wisdom here is that Heseltine would not try to take Thatcher on before the next election (expected in the spring of '87), a time when the party traditionally rallies around its leader. The guess is that Heseltine will choose to play a waiting game, holding back until Thatcher bows out as she has promised to do some time during her third term.

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