SIR Menzies Campbell last night signalled that he might be prepared to drop the Liberal Democrats' plan to tax higher earners with a 50p rate as the four candidates to succeed Charles Kennedy took part in their first televised head-to-head.

As all the rivals declared their desire to see the former leader return to the party's front ranks following his resignation and admission of a drink problem, the 64-year-old acting leader told Sky News the 50p tax plan, a key part of the party's general election campaign, was only "a mechanism" to meet certain social objectives.

Insisting his party's policy should be "fairer taxation not higher taxation", he declared the 50p rate was "not a dogma, it's not the ark of the covenant".

When asked directly if he would keep it, the Fife MP said: "We've got a tax commission which is looking at all of this.

"There are three principles that apply: we must take the poorest people out of paying tax altogether; we must discourage that activity that's damaging to the environment and we must have adequate resources for public services."

However, Mark Oaten, the 41-year-old moderniser who is the party's home affairs spokesman, was more direct, insisting: "We should keep the 50-per cent rate. We go around as a party saying we are going to fund public services and the rate should remain. We should be bold and brave about that."

Simon Hughes, regarded as the more traditional tax and spend candidate, made clear: "I'm absolutely in favour of a higher rate for higher earners, " but stopped short of saying whether the 50p rate was his preferred choice.

On nuclear power, all four candidates appeared in agreement that they were against it, and on tackling climate change the public was told there would be tough choices.

Chris Huhne, the former MEP who has only been at Westminster since May, was the bluntest: "We've had a policy of using road-pricing and charging. We have to be more brutal and more direct and it's going to involve some pain for some people by saying we need to raise fuel duties again and . . . even putting up household fuel bills.

"That will give us money which we can direct back to the low paid in cuts in income tax."

Sir Menzies, who has put the environment at the heart of his leadership campaign, accepted he would have to give up his beloved 20-yearold Jaguar car. "We are all going to have to change our habits, including me, " he said.

While one viewer described the television contest as "a four way love-in", the polite atmosphere was broken only once, when Mr Oaten clashed with Sir Menzies over the calls for a total smoking ban in England.

The Scot said he did not think it was right to expose people to a health risk, but said he would vote for a total ban with reservation. "On balance, it's the better thing to do, " he said.

However, Mr Oaten responded: "No fudge from me on this. I can't support an outright ban. I'm a Liberal."Turning to his older opponent, he then added: "If you're going to be a Liberal Ming, you can't pick and mix which subject you choose to be a Liberal on."

Sir Menzies spoke about restoring credibility and ambition to the LibDems and "maximising" the party's potential.

Mr Hughes said he was "clearer than that" and spoke of his party winning at least 100 seats at the next election, which could produce a hung parliament.

Mr Oaten was even more ambitious talking about over 300 seats and forming the next government.

Mr Hughes's price for coalition was PR forWestminster.

Mr Oaten spoke of "grown-up politics" and LibDems talking to the Labour and Tory leaders, but he ruled out "pacts or coalition".

Mr Huhne, however, appeared more willing to do a political deal, saying his time in the European Parliament showed his party "can work with other parties" while retaining its own identity.

SirMenzies warned against being "hung up" on which other party to go with, adding: "You should go with the British people."

William Hill has Mr Hughes at 4/5, Sir Menzies at 7/4, Mr Huhne at 7/1 and Mr Oaten at 8/1. The result will be declared in March.