William Hague's ballot of the Tory rank-and-file was meant to be the coup de grace that would silence his party's 'dinosaur' pro-Europeans. But they just won't go away
OPERATION SUNRISE was planned in strict secrecy over the summer at Chinese restaurants near Conservative Central Office in Westminster. William Hague wanted to ballot all party members about the policy on the European single currency with the aim of neutralising the dissenters who opposed his sceptical stance, and finally uniting a party that had been split for more than ten years over Europe. The operation was given its code name by Archie Norman, the Tory chief executive, who hosted so-called "sunrise meetings" in the Tory leader's Smith Square office, dashing off e-mails to aides with messages like, "Is the sun rising yet?".

The desire was to bring about a "new dawn" in Conservative politics. But the mission was, it now appears, impossible. Whatever the outcome of the ballot, to be announced tomorrow - and it will undoubtedly be overwhelmingly supportive of the Tory leader's position - Michael Heseltine, Kenneth Clarke and the other pro-Europeans will be as vocal as ever at the party's conference this week. On the fringe, and possibly even in the main conference hall during the Europe debate on Wednesday, they will spell out their opposition to William Hague's stance. In pamphlets to be published during the conference they will set out in black and white the on-going split in the Tory party on Europe. The Bournemouth gathering seems certain to prove to the world that the Tories are incapable of resolving their differences. And the way in which Mr Hague reacts to their refusal to be silenced will be the biggest test to date of his leadership.

It was on 18 August that a small group of senior Conservatives - including Sebastian Coe, Mr Hague's chief of staff, Francis Maude, the shadow chancellor, Andrew Cooper, the director of political operations, Michael Simmonds, the director of membership, and Archie Norman - met to discuss the implementation of a snap referendum. Most people had assumed that it would not be called until nearer the European elections next May; even those who thought it would be sooner judged that Mr Hague would announce the ballot at the conference this week.

BUT THE Tory leader, on holiday in Arizona at the time, was thinking differently. After discussing the issue with his wife, Ffion, he decided that the seemingly interminable split over Europe needed urgent attention, and that Operation Sunrise should be activated forthwith. The "headbangers", as Tory Central Office likes to refer to the pro-Europeans, were planning a concerted effort to hijack the Bournemouth gathering, with nine fringe meetings. Mr Heseltine, the darling of the Tory grassroots cheese and wine circuit, had personally written to all constituency chairmen inviting them to get involved.

Mr Hague knew that his position at the head of the Tory party was being seriously undermined. Stories had begun to circulate that a challenge to his leadership might be imminent. Labour was not even bothering to criticise the Conservatives, reckoning that they were doing more than enough damage to themselves. Mr Hague decided that an immediate ballot was the only solution. "The one strong card which he had left himself was to use democracy to enlist the power of the members to attack the dinosaurs," one member of the Shadow Cabinet said.

As soon as he flew back from the United States, Mr Hague telephoned his aides to warn them that the party would have to move quickly. He wanted to announce the ballot at the beginning of September and unveil the results at the conference.

The number of people informed was kept to a minimum. Mr Heseltine and Mr Clarke were told of the referendum only twenty minutes before it was announced on 7 September. Tory officials found to their satisfaction that the former deputy prime minister was on his way to Heathrow to fly out of the country to China, and that the former chancellor would be largely isolated in making clear that the fight would go on.

On the day, Mr Hague's decision to hold a ballot was praised as a decisive action. But it was a logistical nightmare which soon descended into chaos. Tory HQ had to send voting papers to its 348,000 members, but it had no idea who they were. Although the reforms of the party structure were meant to have created a central membership list for the first time, many of the local constituencies had not yet sent in their databases to headquarters. The deadline to do so was 14 September - a week after Mr Hague had announced the referendum, and two weeks before the last day on which ballot papers could be returned. Party officials worked through the night, surviving on pizzas, as they tried to compile the list of people who should be given a vote.

This was not the only problem. There were also difficulties with the computers. They could distinguish between husband and wife members, but for some reason where the couple was a "Sir" and a "Lady" they were counted as one person - something of a problem for a party that had done more than its share of ennobling during its 18 years in power.

Like Labour, the Tories also had rows about who was eligible to vote. More than 7,000 people who had forgotten to pay their subscriptions were told that they would not be allowed to participate in the ballot.

Even the Post Office contributed to the growing fiasco by taking a week to deliver some of the first-class letters containing ballot papers. A letter from Lord Parkinson, the Tory chairman, to all constituency offices asking them to check that their members had received their papers generated around 2,000 calls from people complaining that they had not.

As chaos threatened to descend into farce last weekend, officials admitted that less than 6 per cent of the ballot papers had been returned. By yesterday, the proportion of Tories who had voted was far higher. But the turnout is still likely to be less than the 80 per cent demanded by pro-Europeans like Ian Taylor. Even Mr Hague's closest allies said only 50 per cent would be a "dream scenario".

THERE WAS no doubt about which way the grassroots would vote - private polling done by the Tory leader's allies in advance had found that 81 per cent of the party's members supported the Hague line. Officials are hoping that they will beat the 65-35 split by which Tony Blair forced through Labour his proposal to scrap the party's sacred cow of Clause IV.

But that will not be enough. Former cabinet ministers on the pro-European wing of the party are now openly criticising Mr Hague almost as viciously as the Eurosceptics attacked John Major. Stephen Dorrell, the former health secretary, who will tell the conference that the ballot result has done nothing to change his mind, said last week: "If you think of the Conservative Party as a brand, what did people associate it with but rows about Europe? This ballot just perpetuates that image." Ian Taylor, another former minister, condemned the ballot as a "misjudgement" on the level of "student politics". "The issue isn't closed, so the ballot cannot close it," he said. "If Hague doesn't get a turnout of 80 per cent that confirms our view that we ought to be continuing to discuss the issue."

The Tory leader sees his ballot on the single currency as comparable to Blair's battle to scrap Labour's historic commitment to state ownership. His allies say that the critics will then become the Tony Benns of their party - "still harping on about it but ignored". But the Tory referendum is very different. It is not, despite the dismissal of the "dinosaurs", a battle of old and new, it is a genuine difference of opinion. It is also less guaranteed to endear the Tories to the country.

Whatever else it achieves, the referendum will ensure that attention at the Tory party conference in Bournemouth is once again focused on splits over Europe. Those differences can be traced back to Margaret Thatcher's Bruges speech 10 years ago this month. In her address - the sacred text of Euroscepticism - she spoke famously of Europe as a "family of nations". She also told her listeners: "Utopia never comes because we know we should not like it if it did." The same could be said of unity in her party.