Byline: Simon Walters POLITICAL EDITOR
DAVID CAMERON'S outgoing strategy guru had a stand-up row with the Prime Minister and his top civil servant over the Coalition's 'lack of direction,' it was revealed last night.
The men clashed at Chequers when Steve Hilton demanded more power over policies at No 10.
Mr Cameron blocked the bid after Britain's top mandarin, Jeremy Heywood - who was appointed Cabinet Secretary in January - threatened to resign in protest.
The Prime Minister told a bruised Mr Hilton to 'calm down' and agreed to Mr Heywood's demand to give control of No 10's policy unit to another Whitehall official.
The decision enraged Mr Hilton's wife Rachel Whetstone, herself a former No 10 aide and now a senior executive at Google's HQ in Palo Alto, California. She told a friend: 'Everyone has ganged up on Steve. I want him here with me.'
Last week it was announced that Mr Hilton was to take up an academic post at Stanford University in California.
Downing Street insists the decision was made for family reasons and Mr Hilton says he plans to return to Britain - and No 10 - next year when his eldest son starts school.
However, the move follows persistent reports that he was on the brink of quitting after complaining that his radical initiatives were being strangled by officials, Lib Dems and Tory enemies.
He fell out with Mr Heywood after calling for Britain to ignore EU work regulations to boost the economy.In a No 10 showdown, Mr Heywood sided with officials from Vince Cable's Business Department who were opposed to the idea.
According to witnesses, Mr Hilton said: 'We should ignore EU rules.'
Mr Heywood replied: 'We can't because it is EU law.'
Hilton: 'I don't buy that. Others ignore EU laws all the time and nothing happens.'
Heywood: 'The PM could go to jail.' Hilton: 'Rubbish. You're being ridiculous.'
Mr Hilton had similar clashes with Mr Cameron's chief of staff, former EU bureaucrat Edward Llewellyn, who disagreed with his insistence that Britain would be better off out of the EU.
Mr Hilton told friends: 'Norway, Brazil and Hong Kong aren't in the EU. They all have McDonald's and they're all doing well. So would we.' …