The former cabinet minister and idol of the party's Thatcherite wing scuppered the Conservative leader's attempt to end Tory divisions over the rejection of free- market solutions in education, health and welfare, announced last week by the deputy leader, Peter Lilley.
Mr Portillo scathingly accused Mr Hague of seeking to copy Tony Blair's repositioning of New Labour while he was Opposition leader. He advised the Tory leader not to "follow fashion" and dismissed claims by his aides that the relaunch was his equivalent of Mr Blair's ditching of Clause Four.
Warning that mere words were not enough, Mr Portillo declared that Mr Blair had matched them with "symbolic actions" such as abolishing Clause Four and renouncing Labour's support for unilateral nuclear disarmament.
"It is not easy for the Conservatives now to find a symbolic action that will persuade people that the National Health Service would be safe with them.
If Lady Thatcher's high spending on health and John Major's real concern for public services have not convinced them, it is unlikely that a speech by Peter Lilley, the deputy leader, will make the difference," said Mr Portillo.
He pointed out that Labour had "heaved overboard thoroughly discredited ideas, including state ownership and trade-union power".
Challenging Mr Hague's strategy of "concede and move on" , he said the parallel with Labour was inexact. "You cannot ditch policies that succeeded so convincingly that they were adopted by our opponents, and much of the free world," he said.
Mr Portillo's intervention will anger Mr Hague. Although the former defence secretary has normally been loyal to Mr Hague, his comments will be seen as an attempt to distance himself from the Tory leader at a time when Mr Hague is under increasing fire from within his own party.
Yesterday, Alan Clark, the veteran MP and former minister, compounded Mr Hague's problems by describing the controversy as "deplorable." He said: "I think the whole row looks bad and shows how incompetently we are being led."
An unrepentant Mr Hague declared that he would press on with his drive to redefine his party. He admitted on BBC radio that there had been some "lively discussion " in his Shadow Cabinet but said: "I am not afraid of controversy."
He insisted the Shadow Cabinet had now rallied behind the new approach to public services. One of the members who criticised it last week, Iain Duncan Smith, the Conservative spokesman on social security, endorsed the new policy last night, saying it left him "free" to pursue plans to reduce the "dependency culture" in the welfare state through reform which "involves and embraces the voluntary and private sector".
Francis Maude, the shadow chancellor, confirmed that the Conservative Party would stick to Labour's pounds 40bn spending increase for health and education over the next three years if it won a general election during that period. He denied that the leadership had performed a U-turn.Reuse content