A thousand champagne-quaffing, canapé-munching Tories are crammed into a drab hotel function room by the Tower of London. The sell-out, sweltering, after-work reception for Conservative supporters from the City projects an unmistakable air of confidence, as the brokers and bankers assure each other that this time they really, actually, honestly can win. Politics is a welcome reprieve, perhaps, from business amid the credit crunch.

But the man who takes the microphone, his unlined face projected to the throng on video screens, cautions with a soft voice against hubris. “We’ve still got work to do,” George Osborne, the shadow chancellor, tells the sea of suits. “As I was coming through the crowd, someone asked me: ‘Are you another budding young Conservative?’ True story.” That self-deprecation is part of Osborne’s armoury of political skills. But the anecdote reflects the thrust of the criticisms that have been levelled at him, and will be used again at the next general election: isn’t he just too immature, too inexperienced, too insubstantial to run one of the world’s largest economies?

Eleven months and one week ago, Osborne gave a speech as shadow chancellor at the Conservative party conference in Blackpool. When last year’s seaside political marathon began, the Tories were trailing badly behind a confident and popular newly installed prime minister. Gordon Brown had dealt nimbly, voters seemed to feel, with a difficult summer: neither widespread flooding, nor an attempted terrorist attack on Glasgow airport, nor the dawn of the credit crisis had laid him low. A typical poll in late August by YouGov gave Labour an eight-point lead, widening to 12 points on the issue of who voters trusted most to run the economy. Senior allies of Brown floated the idea of a snap autumn election, which they expected he would easily win.

CV

Born: Gideon Oliver Osborne – he changed his name as a teenager because “life was easier as a George” – on May 23 1971

Parents: Sir Peter George Osborne and Felicity Loxton-Peacock

Family: Married Frances, a writer and daughter of Lord Howell, the former cabinet minister, in 1998. Two children, Luke and Liberty

Educated: Norland Place and St Paul’s schools, before reading modern history at Magdalen College, Oxford

Career: 1994: Freelance journalist for a few months, before failure to gain a post on a national newspaper prompted him to join the Conservative Research Department

1995-97: Special adviser at the Ministry of Agriculture, Fisheries and Food during the BSE crisis, and worked in the political office at 10 Downing Street

1997: After working on John Major’s doomed general election campaign, appointed as political secretary by new Tory leader William Hague

2001: Elected to the Commons in the safe Tory seat of Tatton, Cheshire. Became an opposition whip, then shadow minister and shadow chief secretary to the Treasury

May 2005: After the third successive Tory general election defeat, appointed shadow chancellor by Michael Howard

December 2005: Ran David Cameron’s successful leadership campaign

Media high: Hailed a hero after the Tory party conference last autumn for pledging to increase the inheritance tax threshold. Sample headline: “Boy wizard has everyone spellbound”

Recreations (as listed in “Who’s Who”): Walking, skiing, theatre, observing American politics

The turning point, many Tories and political observers believe, came when Osborne announced during his speech that a future Conservative government would exempt estates below £1m from inheritance tax. The pledge delighted his audience and large sections of the press, and appeared to enfeeble Brown as he weighed the decision over whether to call an early election. The government saw no choice but to react. Its catch-up tax changes – funding an increase to inheritance tax allowances with a levy on foreigners who live in the UK but escape UK tax on their overseas income and gains – were rushed out days later in a Pre-Budget report, and have damaged Brown’s reputation without sullying that of their Tory originator.

“People’s perceptions of George Osborne changed when he nailed his colours to the tax-cutting mast on inheritance tax,” muses a Thatcherite former cabinet minister. “That was his moment – it transformed the fortunes of the Conservative party. Without that, we’d have had the early election and we’d have struggled not to lose it.”

This August, Osborne was still relishing the moment. Amid the books lining the shelves of his spacious office in Parliament’s modern extension, Portcullis House, stands a “Bottler Brown” beer, its label a mocking reference to the prime minister’s telling moment of indecision last autumn. Osborne talks happily about the “significant change in the political weather” over the last 12 months and, sticking with that metaphor, reminds me unnecessarily that his party has “the prevailing political wind behind us”.

Polls last month put the Tories some 20 points ahead of Labour – a number that, if it translated into votes at the next election, would generate a landslide victory. David Cameron and Osborne, meanwhile, enjoy a significant lead over their Labour rivals on perceived economic competence. And a grim-faced Brown faces the threat of a leadership challenge as he prepares to lead without a mandate for the next two years; an election is now expected in 2010.

Osborne can, therefore, expect a rapt audience when he addresses this year’s Conservative party conference in Birmingham in three weeks’ time. The expectations surrounding him will be very high – perhaps too high.

. . .

Ask Osborne to identify the turning point for the Tories and he will pick a different, earlier moment: the party conference in 2006, the first under David Cameron’s leadership. There was a row brewing over whether the Conservatives should commit themselves to tax cuts, he recalls. Osborne says he decided that he needed to resist rightwing pressure to do so – marshalling his arguments up to the last minute. “I remember changing the speech during the conference,” he says.

The refusal of the Tory modernisers to offer activist-pleasing policies for fear of moving the party off the election-winning centre-ground echoes Tony Blair’s scrapping of clause 4, the article in the Labour party constitution that committed it to the principle of nationalisation. Osborne argues that the decision to adopt a Blair-style economic policy, eschewing unfunded tax cuts, has been proved prescient. “Of all the judgments I’ve had to make, and David Cameron’s had to make on economic policy, that was the most important and has been entirely vindicated by economic events since,” he says. Yet the irony remains: it was his tax-cutting pledge a year later that signalled the start of the Tory party’s rehabilitation in the opinion polls.

The 2006 conference speech was also a personal turning point, he thinks. The period leading up to the gathering in Bournemouth had seen attacks on the shadow chancellor, some from his own side. After his bruising encounters across the dispatch box with an experienced Brown, critics questioned whether he was up to the job. In an article on the day of the speech, the Daily Express asked whether he was “just a boy in a man’s job”, reporting that: “Tory MPs have increasingly come to believe that he only retains his post because his best mate is party leader.”

“There was a newspaper report beforehand saying ‘is this guy really up to the job of shadow chancellor at the age of 35’,” says Osborne, “and after that, that’s never really been asked.” This is true only up to a point. In March last year, Michael Portillo, the serially disloyal Conservative former cabinet minister, pronounced the damning verdict on Osborne of “good but not yet weighty”. And media speculation that Cameron might parachute William Hague, the former party leader, into the Treasury job persisted into last summer.

The 2006 confrontation with the right might have been, as Osborne states, “technically a better speech than last year”, but it was inheritance-tax giveaway that silenced his critics in the party, won the tabloid cheers – “now we can kick out the grave robbers from Downing Street” – and cemented his position at the centre of the small clique who decide Tory policy and strategy.

Osborne’s influence within the party is wide. His combined role of shadow chancellor and general election campaign co-ordinator means his reach stretches far beyond economic issues. “David phones him on everything,” a party insider tells me. “They’re a team.” Analogies between the Cameron-Osborne and Blair-Brown partnerships are inevitable. But Osborne is adamant that his relationship with the Conservative leader lacks the “bad blood” that contaminated dealings at the top of Labour.

Nor would his reign as chancellor mirror Brown’s, Osborne says. He claims to want to scale back the Treasury’s empire and curb its dominance across Whitehall. “I don’t want to be someone who is the domestic prime minister of the government, who fights a series of pitched battles through his department with his prime minister and as a result turns the Treasury into an imperial power base.”

The relationship between Osborne and Cameron is relatively recent. They got to know each other after the 2001 general election, when both were new to the Commons. (Osborne’s closest political friends date back to his days working in Conservative central office in the mid-1990s, when John Major’s administration was dying a slow death.) Both Osborne and Cameron appear temperamentally closer to Blair than to Brown, portraying a determinedly optimistic approach to life while at times appearing ideologically agnostic. This may be one factor in the seeming lack of rancour in the Cameron-Osborne partnership. Another is the contrast in seniority. Whereas Brown was forced to give way over the Labour leadership to Blair, a more charismatic but less experienced rival, Cameron had the edge over Osborne in age and experience when the crunch Conservative leadership race began in 2005.

“The circumstances in which David decided to run for the party leadership and I ran his campaign, are so different from the Blair-Brown story,” Osborne says. “I didn’t want to run for the party leadership. I didn’t feel cheated out of a job. I didn’t feel that somehow Cameron had stolen a march on me... so, far from bearing any sort of grudge or chip on my shoulder, I was absolutely delighted, more than delighted, that he chose to run... and I was extremely delighted that he won.” Cynics might suggest that he protests too much. But Osborne insists he has “genuinely” never regretted ceding the leadership, saying the decision was “not difficult at all”.

. . .

Osborne was born in May 1971, the son of a baronet and a debutante, and heir to the Osborne & Little wallpaper empire set up by his father. He grew up in London and attended St Paul’s school before going up to Oxford. At university, Osborne chose to edit the student newspaper rather than taking the normal path of aspiring politicians by joining the debating society. But he also joined the Bullingdon Club, a notorious dining club frequented by upper-class undergraduates with a taste for drinking.

He entered politics full time in 1994, when he took at job at the Conservative Research Department after a spell trying to secure a job on a national newspaper. After William Hague took over the leadership of the party in 1997, he picked the 26-year-old Osborne out of the ranks of young party workers to act as his political secretary, which meant helping Hague prepare each week for prime minister’s questions with the newly installed Tony Blair. In the space of little more than a decade, therefore, Osborne has gone from writing speeches for Hague full of fierce rightwing rhetoric to championing the centre-ground cause of the present Tory modernisers.

His political skills are not in doubt: he thinks on his feet and even critics admit he plays the competitive and backbiting Westminster system with a deft touch. “George is an extremely shrewd and tactical politician,” one senior Tory says. But questions remain over the ideological ends towards which Osborne would direct his undoubted political skills in a Conservative government.

He still strives to keep politics at bay from the life in London and Cheshire he enjoys with his family, avoiding all formal engagements at weekends apart from the obligatory appearances on Sunday morning politics programmes: “One of the curses of modern political life.” His habitual conversational tics become markedly more pronounced when asked about his children. “Yeah, I keep a life outside politics and, erm, y’know, I try and, well certainly I’ve got my two children and, uh, y’know, I took them to school, not today but yesterday and the day before and, erm, gave them breakfast this morning and, uh, y’know, so I try and make as much time for them.”

This resolve to keep some sort of work-life balance remains rare at the highest political levels, and some rightwing MPs mutter privately that Osborne’s unwillingness to devote all his waking hours to politics reflects the ideological vacuum at the heart of the Cameron project – the young leadership wants power, without knowing what to do with it, the Tory old guard suspects. So what does the shadow chancellor actually stand for?

“I guess I would describe myself as an economic and social liberal with a small ‘l’. I’m a believer in the power of free markets but I’m also a believer in people being free to live our lives socially as well. And I have an innate faith in individuals and communities being in charge of their own destiny, not a big central government prerogative,” he says. It might seem a bland, piecemeal philosophy, designed not to offend. Indeed, Osborne stresses he has “always been quite moderate in my views, not strident in my views. And I don’t think that’s a bad thing.”

He becomes far more animated when talking about power, rather than ideology. Osborne describes vividly how, as a young aide with the unenviable task of briefing Major on his “terrible” media coverage in the run-up to Labour’s 1997 landslide victory, he walked into the prime ministerial residence above Downing Street on the morning before polling day. “This flat, which had been all kind of chintzy sofas, photos of the Major family and all this, suddenly was all in packing cases. And I thought, ‘my God, this is the actual physical transfer of power about to take place’.”

He explains that he belongs to a Tory generation whose “working life has been characterised until recently by the decline of the Conservative party and the rise of Labour ... for most of my adult life, Labour has been the dominant force in British politics.” He is therefore determined to learn the lessons of New Labour’s success by minimising policy pledges that might prove vulnerable to attack.

In a speech to the left-of-centre Demos think-tank last month, he told his Blairite audience that his party was setting an agenda “in the new centre ground of British politics”. He insisted there were real ideological battles to be fought, despite the New Labour flavour of much of the current Tory thinking. “There’s not that kind of black and white, red and blue, division there once was,” he said. “Nevertheless, there are ideas and philosophical differences.”

Not everyone is convinced. “George Osborne’s attributes are he’s obviously quick witted and nobody’s fool. But what he hasn’t managed to establish is a sense of gravitas and authority,” says John Curtice, professor of politics at Strathclyde University. “George has always seemed rather stronger in attack that in explanation mode. The obvious contrast is with Vince Cable [the Liberal Democrat Treasury spokesman and former chief economist at Shell], who clearly speaks with authority, and I’m not sure George has managed that.”

. . .

One day in July, I met Osborne and his advisers at Paddington station and boarded a train with them to accompany the shadow chancellor on a visit to Oxford Brookes University’s technology department. Since we were on our way to the city that is home to one of Britain’s most exclusive educational establishments, it seemed the right moment to ask the class question: aren’t people like him and Cameron just too posh to govern modern, classless Britain?

“It’s not as if I grew up in a stately home with a deer park,” he says, in response to the now-familiar “Tory toffs” attack. Class war fails as a political tactic in modern Britain because both the main parties are perceived as equally posh and detached from real life, he suggests. “What [Labour’s] charge centres on is that we were privately educated. And last time I checked, my opposite number, Alistair Darling, was privately educated, and Ed Balls and various other members of the cabinet.”

“From the public’s point of view, to try and draw a distinction between the chancellor who was educated at Loretto School in Edinburgh and the shadow chancellor, who was educated at St Paul’s, and a prime minister who is living in Chequers and is whisked everywhere in a motorcade, with David Cameron who went to Eton, is an impossible task.” Osborne’s attempt to equate the clear class advantages bestowed by birth on much of the shadow cabinet with ministerial trappings of office seems disingenuous. But recent evidence bears out his assertion on people’s attitude to class, particularly the Crewe and Nantwich by-election in May, during which Labour attacks on the Tory candidate for being a “toff” backfired badly with the voters.

When we arrived, Oxford was in the grip of torrential rain. We rode through the streets past Magdalen. “I went to the prettiest college,” Osborne remarks. When we reach Oxford Brookes, Osborne is shown to the school of technology and enters a room jammed with racing cars, academics, aides, journalists and assorted hangers-on. He is immediately at ease, and obliges the photographers by squeezing his frame into a small Formula 1 chassis. A lecturer boasts that, in the past 11 years, the UK team has won a race for student-designed cars nine times. “And what happened in the other two years?” Osborne asks, in all seriousness.

His competitive streak is evident in his political life. He takes obvious delight in the prime minister’s current plight and recounts with relish how he managed in his Commons encounters with Brown to become “good at getting under his skin. At one point he threw something at me.”

But Osborne insists his party’s resurgence is not simply due to public disenchantment with Labour after 11 years in power. He reels off a list of Labour’s recent “mistakes”: Brown’s scrapping of the 10p income tax rate, the clumsy briefing of a potential stamp-duty holiday, the article by David Miliband, the foreign secretary, in The Guardian that appeared to be a coded leadership bid. “These are wounds inflicted by the government,” he says. “But I would argue that they have been in part brought about by the pressure put on the government by the opposition.” The past year, he says, is when that pressure began to tell.

So Osborne approaches this month’s conference with enviable confidence. “Inevitably, now I’ve been doing the job for three years, I trust my judgment and I trust my political sense of what’s the right thing to say and when to say it,” he says. “You’ll find us at conference very business-like [and] not for a moment assuming Gordon Brown is dead and buried – it’s not how we feel, not least because we’ve had long years of political defeat.”

Despite the switch of Tory and Labour fortunes in the opinion polls since last year, the shadow chancellor stresses his party must take nothing for granted. On the return trip from Oxford to London, he says: “We know we’ve got an extremely tough two years, we’ve got a political battle in sight.” This battle will eventually force the Cameron-Osborne axis to flesh out its philosophy, and will test its readiness for power. It is also likely to give Osborne a much higher profile. As the shadow chancellor prepares to leave his train at Paddington, a fellow first-class passenger accosts him. “Excuse me,” the man asks. “Are you famous?”

Jean Eaglesham is the FT’s chief political correspondent