Michael Fabricant, a Conservative vice-chairman, will today tell David Cameron that the Tories should enter into an electoral pact with the anti-EU party Ukip or face defeat at the next election.

In an interview with the Independent, the high-profile Tory and former government whip says this pact – in which the prime minister sets out plans for a referendum on EU membership in exchange for Ukip not standing against Tory candidates in key seats – could yield up to 40 additional seats. He goes on:

"Such an offer would not be a sign of weakness by the Conservative party. It would be a pragmatic extension of existing philosophy from a party of government. Moreover, this could mark the final rapprochement between warring brothers."

A row erupted this week following the Daily Telegraph's revelation that Rotherham council had taken three children away from their foster parents because the couple were members of Ukip, a decision Guardian columnist Jackie Ashley described as incomprehensible. The council has now ordered an investigation. On Sunday, Ukip leader Nigel Farage said his party would abandon its pledge not to stand against Eurosceptic Tory MPs after Cameron refused to retract comments describing Ukip members as mostly "closet racists".

"No deals, it's war," Farage tweeted. This morning, he added: "The Fabricant deal seems to be based on buying me off. UKIP is bigger than that." However, psephologist John Curtice argues in the Independent that:

"It is little wonder that Tory MPs are worried about Ukip … Earlier this month it secured a record 14 per cent of the vote in the Corby by-election. Not all of Ukip's new converts voted Tory last time – but many did. On average the polls suggest 7 per cent of 2010 Tories have switched to Ukip, compared with 4 per cent of Liberal Democrats and just 1 per cent of Labour voters. If those figures were to be reflected in the 2015 ballot boxes, it would generate a 1 per cent swing from Conservative to Labour – enough to have changed the outcome in 13 seats last time around."

And over on ConservativeHome, Tim Montgomerie argues that according to its polling of Conservative members, a pact with Ukip would be popular with the Tory grassroots. "If David Cameron doesn't address Europe then the party will remain split on the issue and sections of our supporters will remain obsessed by it," he writes.

So should Cameron try to make up with Farage and strike an electoral pact? What would this mean for Tory policy on issues such as immigration and Europe? Where would it leave the government's coalition partners the Liberal Democrats? And what could the consequences be for Labour and its own election strategy?

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