The endorsement from the former deputy prime minister is a big boost for Mr Clarke just nine days before the first round of voting.
Mr Heseltine yesterday told the Independent on Sunday that Mr Clarke, the ex-Chancellor, "has the experience, popular support and capacity to unite the party".
The endorsement comes with Mr Clarke thought to be leading the pack and likely to finish top in the first ballot - but without sufficient support to win outright.
Mr Heseltine called for the "maximum display" of Clarke supporters in the first ballot, adding that the ex-Chancellor's pro-European views need not hamper his leadership prospects.
"If the party wants to unite," Mr Heseltine said, "Kenneth Clarke's view are perfectly able to do that. If the party wants to have division, that takes us straight into the territory of the Labour Party in the 1980s."
Until a health scare shortly after the election, Mr Heseltine was widely seen as a potential contender for the leadership. Many thought he would be the ideal compromise candidate.
Mr Heseltine said the Conservatives should "use the time constructively and methodically to state their principles".
He added: "I was elected in 1966 and saw the party decimated. Four years later we were back in office. That gives you a certain perspective."
Mr Clarke's opponents yesterday disputed the impact of the Heseltine endorsement, arguing that it would be seen as support from "the ancien regime". Because of the complex voting system the ultimate winner is impossible to predict. Mr Clarke may suffer for his trenchant pro-Europeanism in subsequent rounds if his supporters conclude that he cannot win.
William Hague and Peter Lilley, thought to be Mr Clarke's closest rivals, expect to get more endorsements in the final week of campaigning. John MacGregor, the former Cabinet minister, may back Mr Lilley.Reuse content