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Delegates voted overwhelmingly for a code of practice to govern the private finance initiative. Finance spokesperson Dr Vincent Cable MP said the Liberal Democrats 'could reasonably claim to have been the authors of the whole idea of PFI'.

But he called on the government to justify capital costs under PFI, which were estimated to be 10 per cent higher than those under publicly funded schemes.

Under the code, accounting benefits such as the exclusion of PFI schemes from the government's public sector borrowing requirement could not be included in comparisons with public sector competitors.

But Guildford delegate Margaret Sharp won some applause when she attacked PFI as a 'totally ridiculous' concept which the party 'should expose as quickly as possible'.