Using his strongest language to date, the former prime minister said the snap ballot was an attempt at "ethnic cleansing" of the party's pro- Europeans and would be fiercely resisted.
Mr Hague yesterday dismissed Sir Edward as a "sad" figure and pointed to a new opinion poll that showed the British public wanted to rule out joining the single currency for several years.
But the unrepentant former Tory leader renewed his criticism with a passionate assault on Mr Hague's decision to hold a referendum of the party's 300,000 members.
Sir Edward said that although there was no doubt that a majority would back their leader's hardline stance on the euro, it would be a "pyrrhic victory" with disastrous consquences for both the party's and Mr Hague's reputations.
"I feel that the real reason for this poll is to seek out and 'name' those remaining pro-Europeans in the party through some McCarthyite witch- hunt," he said.
The Shadow Cabinet had few established politicians and it would be "suicidal" to marginalise such household names as Kenneth Clarke and Michael Heseltine, he added.
Signalling that the ballot would not deter those such as himself who were in favour of the single currency, Sir Edward issued an ominous warning of trouble ahead.
"I am sure that we have the stomach for the fight against any attempts at 'ethnic cleansing' in our party", he said.
"It has been alleged that this ballot is supposed to unite the party. It will do nothing of the sort. All it will achieve is to institutionalise the divisions within our ranks."
The "completely unjustifiable" decision to hold the referendum with just a fortnight's notice was typical of the desire by the leader and Central Office to centralise power.
Sir Edward's comments followed a counter attack by Mr Hague yesterday on his earlier remarks that he would not join the Conservative party if he were a young man today.
Mr Hague said that the former premier had failed to offer him any support since he became leader, unlike Baroness Thatcher and John Major, both of whom strongly back his referendum decision.
"I don't think he'll ever forgive any of us for leading the party after him," he said. "It's sad but it's true and that's part of what happens in Conservative Party." In a speech in Nottingham to the party's new youth organisation, Conservative Future, the Tory leader unveiled a new opinion poll that showed that first time voters at the next election were the most sceptical about the euro.
The poll, conducted by ICM for the Conservative Party, found that 81 per cent of 18- to 24-year-olds believed that "Britain should rule out joining the single currency until it we can see how it works in bad economic times as well as good." A total of 72 per cent of all age groups also backed the statement.
Nearly one-third of all voters believe that the Government takes more notice of opinion polls and focus groups than parliament, according to a BRMB poll published today in the political magazine Prospect. But the survey also showed that 74 per cent believed that such polls were more in touch with public opinion than MPs.Reuse content