A Conservative minister has warned that his party has failed to dispel the impression that they are "the party of the rich" and that its leaders are happy to see their friends in the City "make a ton of money", reflecting growing concern at Labour's continuing poll lead despite the economic upturn.

Nick Boles, an MP once seen as close to the initial Cameron modernising project, also risked infuriating No 10 by saying that the one Tory who did have wider voter appeal, he believed, was Boris Johnson.

In an unrepentant speech to Bright Blue, a Tory discussion group at Westminster, Boles said "the single biggest problem the Conservative party faces is being seen as the party of the rich. There is a substantial group of people who will literally not even contemplate voting Conservative".

The minister added that as a result some of these voters like the party's policies "but they don't like us and they don't trust our motives", and that a way had to be found to convince these voters that Conservatives "are not aliens from another planet".

He suggested the kind of Toryism presented by the mayor of London was resonating, and that the party could learn from him. "We are already doing what I am suggesting. It just happens to be called Boris Johnson," Boles told his audience.

Johnson should have a "big role" in the Conservative campaign the minister added "and not just in London because he "reaches those elements which have not been reached by the rest of us".

Boles's denunciation of his own party's image echoes the famous self criticism uttered by Theresa May in 2002 when the Tories were in the depths of opposition. She warned at the time: "You know what some people call us: the nasty party."

In his speech, Boles said his perception of the party's image meant that it was hard to sell its core message: "I don't think we have done enough to reassure people about the motives behind economic liberation, that we genuinely believe that you will get better health services or housing or whatever, rather than that our mates who work for private equity will make a ton of money. We have not eradicated that suspicion."

He also admitted that many elderly members are aware of the problem and "desperate for an answer to how to make their grandchildren vote Conservative".

Boles insisted "all the fundamentals were in place for an election winning argument and majority," but said that unless the party could broaden its appeal it would be forced into a redoubt in the south of England.

The party, he said, had to do more to appeal to Liberal Democrat voters in three -way marginals and in seats where the Conservatives are trying to usurp a sitting Lib Dem MP.

Although he insisted he was not challenging the strategy set out by Lynton Crosby, his remarks suggest there is an unease about whether the party has done enough to overcome the party negatives identified by Lord Ashcroft as critical to the party's defeat in 2005, and inability to secure a majority in 2010.

Boles suggested that one way to win over liberal voters was to stand Conservative candidates as National Liberals. "An explicit National Liberal pitch might make the difference between victory and defeat," he said, suggesting this appeal would be strongest among younger voters put off by the current monolithic image of the Conservatives designed to appeal to stalwart party supporters.

By reviving the National Liberal party, he said, "we could use it to recruit new supporters who might initially balk at the idea of calling themselves Conservative".

The proposal also underlines the degree of disillusionment between Lib Dems and Tories, as Boles was initially the Tory party's biggest enthusiast for the coalition.

But Boles claimed Nick Clegg was twisting and turning as he descended into "a principle-free zone preparing for a coalition with a deeply illiberal Labour party after the next election". He admitted he had misjudged the Lib Dems saying the heart of its party beats to the left and its instincts are statist.

He said: "I thought our willingness to compromise with the Liberal Democrats in the national interest would help persuade the public that we moderated our ideological fixations, would show we had really changed. I did not realise that our coalition partners would do everything in their power to paint us as heartless extremists.

"And I underestimated the readiness of some in the Conservative party, and the press, to play up to the caricature and thereby fall squarely into their trap."

Boles compared the idea of the National Liberal party affiliated to the Conservatives to the way in which some Labour MPs are members of the Co-op party.

The last two Conservatives that stood as National Liberals were Michael Heseltine in Gower in 1959 and John Nott in St Ives in 1966.

Boles said the coalition must continue to the end, but said: "We must be our own liberals. We cannot rely on anyone else to do it for us. Trying to outsource liberalism from another party not only does not work, it risks reversing the fragile gains of modernisation."

He added: "Although there are some proper liberals in the upper echelons – Jeremy Browne and David Laws – in the last year the Liberal Democrat party has shown that it is not a liberal party but a statist party of the soft left."

He said his party had to confront the reality that at the time of the merger between the Liberal party and the Social Democrats, the Social Democrats won inside the Lib Dems. "Having been pushed out of its ancestral halls, liberalism is now wandering the streets of British politics looking for a new home," he said.

He also offered a critique of his own party, saying that "too often it appears like an old-fashioned monolith". Such a monolithic offer was likely to be particularly unappealing to people aged under 25. "This group of voters represents a fantastic opportunity for the Conservatives, but we have no hope of securing their support if we approach them with the same proposition that we use to woo out stalwart supporters," he said.