The defection by James Moorhouse as Tory MEP for London South and Surrey East to the Liberal Democrats came as a blow to Mr Hague's leadership as he prepared to make the keynote call to the Tory conference in Bournemouth for the party to pull together behind his policy to "save the pound".
Mr Moorhouse said: "As of 20 minutes ago, I am a committed Liberal Democrat."
He was welcomed with open arms by the Liberal Democrats, increasing their MEPs to three until the European elections next year, although he was not guaranteed a seat to fight. Paddy Ashdown, the Liberal Democrat leader, invited other dissident Tory MPs to join the Liberal Democrats. "We have a chance to be the new political home for those who have lost patience with the Conservative Party's lurch towards extreme and impractical anti- Europeanism," he said.
There had been confusion after senior party sources said the party had expelled two MEPs - John Stevens, MEP for Thames Valley, and Brendan Donnelly, MEP for Sussex South and Crawley - over reports that they were seeking to join other parties in the European Parliament.
In last-minute negotiations last night, the retiring party chairman, Lord Parkinson, intervened to keep them in the fold with an assurance that they will be allowed to stay in the party and oppose the official policy on the euro.
Earlier, they had issued a statement saying they had been expelled and accusing the Tory Party of being turned into a "Little England out of Europe" party. Mr Stevens said: "Given the party's present EMU policy, it would have been impossible for me to vote Conservative at the next European election."
All three MEPs were deselected recently by their Tory associations. Mr Stevens, a wealthy former market trader, is planning to return to the City after the European elections next June.Reuse content