The Foreign Secretary picked up some of eliminated Attorney General Suella Braverman’s backers in the third round of voting by MPs, going up from 64 to 71, but far from enough to move into second place.
Meanwhile, Ms Mordaunt suffered a body blow as she dropped a vote to 82 and seems to be struggling to maintain the momentum in her campaign as she faces more attacks over her stance on gender issues.
Crucially only the top pair go forward to the run-off among Tory members.
Tory leadership contest – round three result
Rishi Sunak: 115 votes
Penny Mordaunt: 82 votes
Liz Truss: 71 votes
Kemi Badenoch: 58 votes
Tom Tugendhat: 31 votes – eliminated
However, Kemi Badenoch – initially regarded as an outsider – is still in the hunt after racking another nine endorsements, taking her to 58.
Some votes were up for grabs as MPs drifted away from Tom Tugendhat, who has been knocked out after coming bottom with 30.
Mr Sunak’s team had feared he would not add much to his tally, instead anticipating that he could benefit from Mr Tugendhat’s departure. But in the event they were jubilant as he increased his score from 101 to 115.
Anything over 120 guarantees a place in the final two, as there are 358 Conservative MPs in total.
The focus now moves to the fourth round of voting tomorrow, and whether Ms Badenoch can overhaul at least one rival to stay in the race.
A spokesman for the Truss campaign said: ‘Liz is the candidate to lead a bold new economic approach, cut taxes, deliver on the benefits of Brexit, unite the Party and win a General Election.
‘Tom Tugendhat ran a campaign that he can be very proud of and he has shown the depth of quality in the Conservative Party.
‘Now is the time to get behind the best candidate to deliver the economic change we need.’
Former Tory leader Sir Iain Duncan Smith, who is backing Ms Truss, insisted she had ‘gone forward’ while Ms Mordaunt’s campaign had ‘stalled and gone backwards’.
A Sunak spokeswoman said: ‘Rishi has done well today because he is the candidate with the clearest plan to restore trust, rebuild the economy, reunite the country and because he is best placed to beat Labour at the next election.’
Mr Tugendhat said: ‘I want to thank my team, colleagues and, most of all, the British people for their support. I have been overwhelmed by the response we have received across the country. People are ready for a clean start and our party must deliver on it and put trust back into politics.
‘I wish the remaining candidates well and look forward to continuing to serve the British people and fully supporting the next leader of the Conservative Party and Prime Minister of the United Kingdom.’
The intense intrigue at Westminster comes after it emerged that the candidates have endured their final TV debate in this phase. Sky News cancelled their showdown after both Mr Sunak and Ms Truss pulled out, with sources saying they wanted to limit infighting.
Rishi Sunak and Liz Truss are still in the leadership battle as it enters the final stages before going to a ballot of Tory members
Penny Mordaunt was installed as the surprise front runner, but her campaign appears to be struggling to keep momentum
Kemi Badenoch has exceeded expectations with her campaign, backed by former Cabinet minister Michael Gove
The third round result was announced in parliament by 1922 committee chair Sir Graham Brady
A snap poll by Opinium found that the former Chancellor emerged on top from the extraordinary blue-on-blue session on ITV, cementing his status as the front runner
HOW THE TORY LEADERSHIP RACE WILL PLAY OUT
Today – A third ballot of Tory MPs was held with Tom Tugendhat coming bottom and being eliminated.
Tomorrow – Another ballot will be held to whittle the numbers down to three.
Wednesday: Assuming no-one drops out, a fifth ballot will decide the final pair, ending the parliamentary phase of the contest.
21st July – MPs will head away from Westminster for their summer break.
Late July and August – CCHQ will assume responsibility for leadership election and will send out ballot papers to around 200,000 Conservative Party members. The Tory grassroots will be asked to decide between the final two candidates, with hustings events to be held across the UK.
5th September – The result of the membership ballot is announced, with the candidate receiving more than 50 per cent of the vote being declared the new Tory leader and Boris Johnson’s replacement as Prime Minister.
6th September – The new Tory leader is likely to be formally appointed as PM during a visit to the Queen at Buckingham Palace.
7th September – The new PM is set to be quizzed in the House of Commons in their first ever Prime Minister’s Questions.
George Freeman, a key supporter of Ms Mordaunt, tried to put a brave face on the results, predicting that she will pick up ‘a lot’ of Mr Tugendhat’s supporters now that he has exited the contest.
He told Sky News: ‘After the three days’ pounding she’s had in the media, to be honest I’m delighted she’s held second place.
‘Nobody has been attacked so savagely in the Tory press than Penny Mordaunt and her support is strong.
‘I think the story tonight is Kemi Badenoch is becoming the heroine on the right, she’s picked up a lot of votes.
‘I think what you’ll see now is a lot of that One Nation support base for Tom Tugendhat… I think a lot of them will come to Penny as the One Nation compassionate Conservative.’
Worryingly for Ms Mordaunt, one of Mr Tugendhat’s key allies Anne-Marie Trevelyan said she expected his supporters would ‘travel as a pack’ on who to endorse next.
And she reiterated her criticism of Ms Mordaunt’s performance as a trade minister, saying colleagues had to ‘pick up the pieces’ while she spent months plotting a leadership bid.
‘The challenge in our case, in the Department for International Trade, has been that she has – in a number of situations – not been available to take up the work that was required in a number of ways, be it visits or parliamentary duties,’ Ms Trevelyan said.
Mr Duncan Smith told Sky News that Ms Truss is in ‘prime position’ to make the run-off.
‘You’ve got to understand how these things work, what happens is – in this round – those that go forward will be the ones that benefit in the next round,’ he said.
‘Liz is definitely in that, she’s in prime position to do that. Because there are still a lot of votes sitting there that are likely to come to Liz at some point once this is settled.’
Sir Iain claimed that support for Ms Badenoch had grown because Tory MPs ‘wanted to stop Penny’, adding: ‘Now they have to make a decision as to who they want to vote for.’
He urged Ms Badenoch’s supporters to ‘come together with Liz’.
Tory former chief whip Mark Harper, who is supporting Mr Sunak, hailed a ‘very solid result’ for the ex-chancellor.
‘We’re optimistic but we’re not going to take a single thing for granted,’ he told Sky News when he was asked if Mr Sunak was nailed on to reach the final pairing.
‘If you look at where the votes went, Rishi was up 14 – that was a stronger performance than any other candidate at a time when the votes that were freed up by Suella (Braverman) exiting the contest were very unlikely to come his way.’
Earlier, a backer of Mr Sunak predicted that it was going to be ‘quite a tough day for us in terms of the ballot, because if you look at the free votes sort of floating around from the candidate that got knocked out last week, I think it’s probably fair to say that we’re not going to pick up very many of those, I suspect’.
The candidates have faced off in a debate for the last time, after Mr Sunak and Ms Truss pulled out of a Sky News showdown that had been planned for tomorrow night.
Supporters of Ms Truss had voiced alarmed about the level of ‘squabbling’ in the clashes so far, and regard the Channel 4 one in particular as a ‘mistake’.
A statement from Sky News read: ‘Two of the three candidates currently leading in the MPs ballots, Rishi Sunak and Liz Truss, have confirmed to Sky News that they do not want to take part.
‘Conservative MPs are said to be concerned about the damage the debates are doing to the image of the Conservative Party, exposing disagreements and splits within the party.
‘Both are very welcome to taking part in future Sky News televised debates.’
A source on the Sunak campaign said: ‘We are very happy to do more debates if we are lucky enough to get to the next stage.’
They insisted Mr Sunak had never confirmed with Sky that he would be taking part.
In a statement that was issued and then swiftly replaced with a toned-down version, the Mordaunt campaign jibed that her opponents were ‘dodging’ scrutiny and renewed complaints about smears.
‘Penny’s always happy to debate with the other candidates at any time. Throughout this contest she has never dodged media or shied away from broadcast interviews and debates,’ the statement said.
‘It’s a shame some colleagues cannot find a way to debate one another in a civil way.’
Keir Starmer said he was ‘astonished’ by the withdrawals, saying it demonstrated a lack of ‘confidence’.
A snap poll by Opinium found that the former Chancellor emerged on top from the extraordinary blue-on-blue session, cementing his status as the front runner.
Some 24 per cent thought Mr Sunak came out on top in the debate, with Mr Tugendhat second on 19 per cent, Ms Mordaunt third on 17 per cent, narrowly ahead of Ms Truss on 15 per cent and Ms Badenoch’s 12 per cent.
Mr Sunak was also the choice of Tory voters, although the advantage was only 24 per cent to 21 per cent for Ms Mordaunt and 20 per cent for Ms Truss – a major improvement for the Foreign Secretary after her stuttering turn in the first debate.
Mr Sunak attacked Ms Truss for promising ‘something for nothing’ tax cuts during the clashes, as well as asking ‘which she regrets most’ out of backing Remain in the referendum and previously being a Liberal Democrat.
Ms Truss accused Mr Sunak of ‘business as usual’ economic management and ‘choking off growth’ by increasing the tax burden to the highest level in 70 years, insisting she had argued against the national insurance hike in Cabinet.
She accused the former chancellor of encouraging a recession by raising taxes, adding that his approach was ‘preventing companies from investing and it’s taking money out of people’s pockets’.
But Mr Sunak retorted that the country had been through a once-in-a-century pandemic and there was a ‘cost to these things’.
‘I’d love to stand here and say ”look, I’ll cut this tax, that tax and another tax and it will all be okay”. But you know what? It won’t,’ he said.
‘There’s a cost to these things and the cost of higher inflation, higher mortgage rates, eroded savings. And you know what? This something for nothing economics isn’t Conservative. It’s Socialism.’
He added that Ms Mordaunt was proposing to drop one of his fiscal rules against borrowing to fund day-to-day spending, saying ‘even Jeremy Corbyn didn’t suggest that we should go that far’. ‘If we are not for sound money what is the point of the Conservative party?’ he said.
When Mr Sunak goaded her over voting Remain and being a Lib Dem in the past, Ms Truss admitted she had been ‘on a political journey’ and had a dig at his privileged public school education. ‘The reason I am a Conservative is that I saw kids at my school being let down in Leeds – perhaps not getting the opportunities you had at your school, Rishi.’
All five contenders were asked by host Julie Etchingham to raise their hands if they wanted Boris Johnson to serve in their government. None did – although Ms Mordaunt did interject that Mr Johnson ‘got Brexit done’.
Ms Mordaunt also slapped back at ‘smears’ about her views on trans rights, denying that she had tried to rewrite history about supporting self-identification with medical assessment. She said she ‘knows why this is being done’ but any attempt to paint her as ‘out of touch’ will ‘fail’.
Transport commitee chair Huw Merriman tweeted a photo of Mr Sunak at Conservative Environment Network hustings today
Rishi Sunak, Liz Truss, Kemi Badenoch, Tom Tugendhat and Penny Mordaunt (pictured left to right) clashed in the second televised Tory leader showdown last night