Conservative party conference: George Osborne thanks David Cameron for not sacking him

David Cameron came close to removing George Osborne as shadow chancellor in 2008, according to Lord Ashcroft's biography of the Prime Minister

George Osborne makes his keynote speech to the Conservative party conference (PA)

George Osborne has thanked David Cameron for sticking by him after it was claimed last month that he was nearly sacked by his close friend and political ally before the pair entered Downing Street.

He also thanked him for having “never wavered” in his support, despite “lots of people” having doubts about his plans in his first couple of years as Chancellor.

According to Lord Ashcroft’s biography of Mr Cameron, Call Me Dave, the Tory leader was advised by some to remove Mr Osborne as shadow chancellor two years before the 2010 election after he became embroiled in a damaging row over claims he tried to channel donations to the Tory party from a Russian oligarch – which he strongly denied.

David Cameron watches on as George Osborne delivers his keynote speech to the Tory party conference (PA)

Mr Cameron hinted in private that he would be prepared to sack Mr Osborne if it was “absolutely necessary,” according to Lord Ashcroft’s biography of the Prime Minister, Call Me Dave.

But he resisted and today, seven years on, Mr Osborne used his keynote speech at the Conservative party conference to pay tribute for Mr Cameron for his support and said he had earned a place “in the very highest rank of our party’s leadership”.

“There were moments when lots of people had doubts whether our plans would work moments, as I was well aware, when people had doubts about me,” Mr Osborne told Tory delegates.

“But one person always backed me in private and in public, and never wavered in their support. I want to thank him.

“That is the person who’s led our country with integrity, intelligence and imagination, my friend, our Prime Minister: David Cameron.

“Under David’s leadership, after a full term in Government we increased both the number seats we hold and the share of the vote we won.

“That’s a winning combination no Prime Minister of any party has achieved since the nineteenth century. It earns David not just a mandate to govern; it earns him a place in the very highest rank of our party’s leadership. David, we salute you.”

Mr Osborne found himself in trouble in 2008 after he attended an exclusive party hosted on a £70m yacht by financier Nat Rothschild on the Greek island of Corfu and attended by former Labour Cabinet minister Lord Mandelson, who was shortly brought back into the government by Gordon Brown, and Russian oligarch Oleg Deripaska.

With the outcome of the 2010 general election very much hanging in the balance, Mr Osborne decided it would boost his and Mr Cameron’s chances of winning by leaking damaging information about Mr Brown that Lord Mandelson had told him in private during the party – information that was described as “pure poison”.

Mr Rothschild in turn wrote a letter to The Times accusing Mr Osborne of trying to solicit donations to the Tory party from Mr Deripaska, potentially illegal under UK election law, which Mr Osborne denied.

Mr Cameron initially told colleagues that he thought the episode was “a storm in a teacup” and would soon blow over, according to the book, despite days of front page headlines.Responding to the claims, Mr Osborne said he would not “dignify” the book with a response. Downing Street has reacted to claims in the book in the same way.

Mr Osborne also faced widespread ridicule after his 2012 Budget, which was dubbed an "omnishambles" and was urged to change his economic strategy as economic indicators initially suggested his aim of boosting confidence and encouraging investment was having the opposite effect.