(London) Who’s nasty now?

Sipping cocktails and swapping gossip on a roof terrace decorated with pink balloons and rainbow flags at a gay-oriented disco, leading figures of Britain’s once-hidebound Conservative Party mingle happily with those many in its ranks once derided.

Once described – by a senior Conservative official, no less – as the “nasty party,” the traditional home of Britain’s sometimes intolerant upper classes has undergone something of a transformation as it bids to win power for the first time since 1997.

But critics ask: is the makeover real or cosmetic?

Activists gathered in the northern England city of Manchester for an annual conference certainly showed off the newly inclusive spirit this week – dancing at the party’s first official gay reception, promoting aspiring lawmakers from Britain’s minority communities and cheering a newfound commitment to tackling poverty.

The loudest praise was reserved for the architect of the party’s niceness transfusion – David Cameron, the slick 43-year-old ex-public relations executive who’s overhauled his organization’s image and now seeks to oust Prime Minister Gordon Brown.

“You only have to look around the conference and see the different types of people who are here,” said Stuart Andrew, a gay Conservative candidate for a House of Commons seat. “They just wouldn’t have been here 15 years ago.”

But Tory suspicion runs deep in much of Britain – largely because of a reputation for heartlessness toward the poor.

The Conservatives swept to power under Margaret Thatcher in 1979 on a promise to modernize Britain’s economy, sweep away bureaucracy and tame powerful trade unions. They were reelected in 1983, 1987 and 1992, but without ever shaking off their image as the party of the white, affluent and sometimes intolerant.

Thatcher once shut down school programs for milk distribution, earning the nickname “Thatcher the milk snatcher.” In the 1980s, the party imposed laws banning the promotion of homosexuality in schools and shuttered coal mines – ruthlessly crushing strikes and putting generations of men in mining communities out of work.

By 1997, Tony Blair’s Labour Party was able to paint itself as the party of progress and an inclusive, modern Britain – and the Tories knew they had a problem.

Theresa May, the Conservative chairwoman, admitted as much in a speech to the party conference in Bournemouth, England on Oct. 7, 2002.

“There’s a lot we need to do in this party of ours,” she said. “Our base is too narrow and so, occasionally, are our sympathies. You know what some people call us – the nasty party.”

The notion stuck – even though many still view Thatcher as a savior of Britain’s economy reversing the country’s steep decline, breaking its dependence on unions and industrial behemoths – giving the country needed a dose of nasty medicine.

But Cameron’s skeptical stance toward the European Union has angered leaders in France and Germany, who warn relations with London could sour if he takes power.

Many hear echoes of Thatcher, and Ronald Reagan, in Cameron’s attacks on big government and welfare dependency.

Some conference delegates – and outsiders – were angered by convention invitations extended to Latvian and Polish lawmakers from parties accused by human rights activists of being homophobic or anti-Semitic.

It has led to questions about Cameron’s drive to end his party’s former hostility toward minority groups – a sentiment traced back to Thatcher’s era, when a contentious law, known as Section 28, barred teachers from promoting homosexuality in school lessons.

Other skeptics also question Cameron’s commitment to reducing poverty, pointing to his plans to freeze the pay of millions of government workers while helping the wealthy by cutting taxes on inherited mansions.

Nonetheless, Cameron, elected leader in 2005 with a mandate to drag his traditionalist followers into the modern era, has worked doggedly to shed the party’s image as a haven for the rich and expensively educated.

He rides a bicycle to work, rather than a chauffeured limousine. He’s quashed borderline racist rhetoric on immigration to focus on the environment and health care, and has demanded that his party promote more women and ethnic minorities to key positions.

In intimate Web videos, Cameron shows off his domestic life – washing dishes in the sink of a chaotic kitchen while patting the heads of playful young children.

His wife Samantha – a successful businesswoman who updated the tired image of stationery brand Smythson – is in tune with the party’s mood, eschewing haute couture for a relatively inexpensive dress from mainstream department store Marks & Spencer on the day of her husband’s keynote convention speech.

It’s a makeover designed to combat the party’s corrosive image as Tory “toffs,” and summed up in their slogan: “We’re all in this together.”

Yet opinion polls show many Britons aren’t persuaded that Cameron has transformed his party, or convinced his political rebranding is genuine. Pollsters say voters often recall how Cameron was photographed cycling to Parliament – as a car and driver followed close behind with his suit and briefcase. They also note the leader’s privileged education at Eton and Oxford.

Though Cameron is overwhelmingly favored to win Britain’s next national election, some detractors suggest his victory would be a rejection of Brown’s flagging government, rather than enthusiasm for the Conservatives.

Britain has thus far not embraced the Tory chief as it did Labour’s Tony Blair before his landslide election 1997 win – when millions were swept along by ‘Cool Britannia’ rhetoric, and promise of sweeping social reform.

“It’s not the groundswell of support that Blair received before 1997,” said Julia Clark, head of political research at Ipsos MORI. “Cameron has successfully detoxified his party and is seen as a credible leader – but that’s the problem, it’s all about Cameron. People aren’t so sure about the rest.”

Cameron won praise after he formally apologized for the anti-gay Section 28 in July at an event ahead of London’s Gay Pride rally.

He was also applauded for a 2006 speech in which – pledging tax incentives for marriage – he said a union was just as valid “whether you’re a man and a woman, a woman and a woman or a man and another man,” a key break with party tradition.

Ben Summerskill, chief executive of the gay rights group Stonewall, insists Cameron’s attempt to change attitudes has been a success.

“There has been a transformation,” he said. “I think it is inconceivable – not just 10 years ago, but five years ago – that we would have had the leader apologizing for the damage and offense caused by Section 28.”