Boris Johnson and Jeremy Hunt to face off for final time in battle for No 10

Tory leadership contenders Boris Johnson and Jeremy Hunt will go head to head for what is expected to be the final time as the race for No 10 enters its closing stages.

The two men will take part in a debate, hosted by The Sun and talkRadio, in front of a live studio audience in London on Monday in what could be the last chance to change the course of the battle to succeed Theresa May.

Mr Johnson remains the clear favourite to enter Downing Street on July 24 but supporters of Mr Hunt believe that he is gaining ground.

It had been thought that most of the ballot papers from the party’s 180,000 grassroots members would have been returned by this stage of the contest.

However reports suggest the votes have been coming in more slowly than expected, suggesting many members have been keen to see how the two candidates perform in the campaign before making up their minds.

The last encounter, in an ITV debate last week, was a spiky affair dominated by the fallout from the leak of the diplomatic dispatches of Britain’s ambassador to the US Sir Kim Darroch criticising Donald Trump’s White House as “dysfunctional” and “inept”.

The following day Sir Kim resigned amid accusations that Mr Johnson’s lack of support for him in the debate – in contrast to Mr Hunt’s strong backing – had made his position impossible.

The former foreign secretary was angrily denounced by MPs and senior civil servants with claims he had effectively thrown Sir Kim “under the bus”.

The Times reported that if he succeeds in gaining the keys to No 10, one of his first acts will be to reset relations with Mr Trump after he responded to the leaked cables with a furious tirade against Sir Kim and Mrs May.

He was said to to be planning to make an early trip to the United States to start laying the groundwork for a post-Brexit trade deal.

But International Trade Secretary Liam Fox dismissed suggestions that a Johnson-led government would be able to strike a deal with Washington as soon as the UK leaves the EU on October 31.

Dr Fox, who is supporting Jeremy Hunt for the Tory leadership, told BBC Radio 4’s Today programme: “We can’t negotiate anything with the US until after we have left the European Union. It would be in breach of European law for us to do that.”

In his Daily Telegraph column, Mr Johnson wrote about offering “preferential” tax treatment to companies which look after their staff, particularly in terms of supporting them through mental health issues.

He said: “It is time for the Treasury and the NHS to work together to review the rules.

“And if they can come up with a plan – and I am sure that they can – we should put it into effect this autumn in what, if I am lucky enough to be elected, would be the first budget of the new Government.

“Yes, of course all tax breaks cost money. But any loss in revenue would be more than made up by the gains in productivity and the savings in NHS spending.”

Meanwhile, Mr Hunt, the Foreign Secretary, will spend much of the day ahead of the debate in talks in Brussels with fellow EU ministers aimed at defusing tensions in the Gulf.

In a joint statement on Sunday, Britain, France and Germany urged the US and Iran to pull back from conflict amid fears of a slide to war.

Mr Hunt also made clear that he believed Sir Kim’s successor in Washington should be a career diplomat rather than a political appointee.

His comments came amid speculation that Mr Johnson could seek to appoint a Brexiteer to the post in the hope that it would appeal to Mr Trump, who has long made plain his support for the 2016 referendum vote to leave the EU.