The Conservative leadership would aim to push through an emergency budget, including spending cuts and a possible rise in VAT, with the support of the Liberal Democrats if David Cameron fails to secure an overall majority in the Commons at the general election.

The revelation that senior Tories see the Lib Dems as their natural partners comes on the eve of Cameron's final party conference speech before the election in which he will declare he is "ready to be tested" as prime minister.

He will draw on biblical references to offer a more positive vision to the nation after the dire warnings on the state of the nation's finances, saying: "There is a steep climb ahead, but the view from the summit will be worth it."

Despite the optimism in Cameron's speech today, it is also clear that the Tory high command is looking at tax rises to fill the gap in the nation's finances. Senior Tories freely admit that the measures announced in shadow chancellor George Osborne's speech on Tuesday will only make a dent in the fiscal deficit.

The Institute for Fiscal Studies has said that the measures, including a pay freeze for 5 million public sector workers, will only reduce the deficit by a sixth of the amount the government has committed itself to cut by 2013-14.

A rise in VAT to 20% in an immediate post-election budget would raise as much as £13bn. Shadow ministers have not ruled out the move, saying such a rise would not necessarily choke off the recovery. In his conference speech Osborne was strongly critical of the VAT cut from 17.5% to 15%, saying it had had little or no effect on stimulating the recovery. VAT is due to be put back to 17.5% after Christmas and other taxes, including a 50p tax rate for those earning over £150,000, are due to be introduced in April.

Overall Labour has said that 80% of the reduction in the deficit to 2013-14 will come from spending cuts and 20% from tax rises. It is known that cabinet ministers have also been privately discussing a VAT rise coupled with increases in personal allowances for the low-paid.

Senior Tory sources, who say they are confident of winning the general election outright, have none the less been preparing for a hung parliament. If that were to happen they believe the Liberal Democrats would be more likely to support a minority Conservative administration than prop up a Labour government.

One senior Tory source said: "If no party wins an overall majority and then there is a hung parliament then the largest party will be invited to form a government. It would be highly unlikely we would form a coalition with the Lib Dems, but we might be able to reach an understanding with them." The source noted that the Lib Dem Treasury spokesman, Vince Cable, recently wrote a pamphlet in which he called for the fiscal deficit to be reduced at a faster rate and highlighted the possibility of a rise in VAT to 20%.

Osborne is understood to be relieved that tough spending cuts medicine in his speech has not led to a political backlash in the polls. A Sky News/YouGov tracker poll last night showed the Tories rising by two points to 43, giving them a 14-point lead over Labour. But Labour also increased its share, increasing a point to 29%. The Liberal Democrats fell by a point to 17%. Such a result in a general election would give the Tories an overall majority of more than 100.

In an interview with Radio 4's Today programme Osborne defended his decision to spell out some spending cuts in his speech, saying: "We need a democratic mandate for what needs to be done ... I'd rather be honest about that before the election than lie to you before the election and then be found out afterward."

Closing the conference in Manchester today, Cameron will use language inspired by Matthew's Gospel to tell voters: "If you put in the effort to bring in a wage, you will be better off. If you save money your whole life, you'll be rewarded. If you start your own business, we'll be right behind you. If you want to raise a family, we'll support you."

But he will warn that "painful" cuts in public spending lie ahead. "None of this will be easy. We will be tested, I will be tested. I'm ready for that – and so I believe are the British people."