The Prime Minister won the critical vote on the Bill by 330 votes to 303 - at the cost of making it an issue of confidence - after party business managers had used a mixture of threats and cajolery to limit the number of rebels to single figures.
Seven abstained on a Labour amendment to the Bill raising UK payments to Europe - which threatened to delay its passage for a year - in clear defiance of the threat that they would lose the whip, the nearest party political equivalent to total ostracism.
Mr Major will now technically lead a minority government. On paper the Government loses its working majority of 14 since the rebels will no longer officially count among the 330 MPs numbered as the Tory ranks until last night. Instead they will appear in official lists with the Opposition.
The practical impact of the move was a matter of dispute last night. Party managers insisted that the rebels would now be forced to work their passage back by supporting the Government in future divisions. An MP with the whip withdrawn cannot stand as an official Tory candidate in a general election. But some MPs suggested it could rapidly increase the prospect of further revolts - including on the second-stage increase in VAT on fuel next week.
The abstainers on the Labour amendment were Richard Shepherd, Tony Marlow, Teresa Gorman, Sir Teddy Taylor, Nicholas Budgen, John Wilkinson, and Christopher Gill. They were then joined by Michael Cartiss, MP for Great Yarmouth, in abstaining on the substantive Second Reading vote - which the Government won by 329 to 44 thanks to mass Labour abstentions. It was confirmed last night that Mr Cartiss would be subject to the same disciplinary action.
At the same time Sir Richard Body, another leading Eurosceptic - who, however, voted with the Government last night - refused to confirm or deny widespread reports that he had simultaneously resigned the party whip of his own accord.
The action against the rebels was the first of its kind in the Tory party in post-war history and the most draconian in any party since Hugh Gaitskell withdrew the whip from half a dozen Labour rebels led by Michael Foot in 1961. The potentially heavy price in popularity paid by the Government among right-wing MPs was apparent last night when Sir George Gardiner, MP for Reigate and chairman of the right-wing 92 Group of backbenchers, said: ''I supported the Bill tonight but I have no pride in my government or even in myself for so doing.''
The Government's high-wire act succeeded after a debate opened by Kenneth Clarke, the Chancellor, who led an uncompromising counter-attack on the rebels.
In a typically robust 65-minute Commons performance that included a forensic dissection of the arguments used by Tory opponents of the Bill to raise contributions to the European Union, Mr Clarke attacked one of the most prominent Eurosceptic MPs, William Cash, for talking ''alarmist nonsense'' about Britain's EU contributions, and defended what he said had been ''the superb negotiating triumph'' achieved by Mr Major at the Edinburgh summit two years ago and enshrined in the Bill.
Mr Clarke's speech opened the Second Reading debate amid increasingly desperate behind-the-scenes efforts by right-wing enemies of the Prime Minister to enlist the left-wing support needed to muster the necessary 34 signatures by noon today to force a leadership contest.
Norman Lamont, the former Chancellor, who at the weekend all but ruled himself out as a ''stalking horse'', nevertheless set himself at the head of the critics of the Government's European policy by again canvassing the option of withdrawal from the EU.
Mr Lamont, a principal negotiator of the Edinburgh deal, attacked the assumption that EU membership was necessarily worth the contributions made to it and warned: ''Europe is an issue which risks splitting the Conservative Party. The party as a whole has not yet accepted that the ambitions of our partners are not compatible with Britain's continued ability to govern ourselves as an indepedent sovereign state.''
He declared: ''I believe this country needs to redefine its relationship with Europe on a permanent basis. I have become persuaded that we in this country have to consider all options if we cannot negotiate a special relationship between Britain and our partners, including even withdrawal.''
Mr Clarke mounted an unashamed defence of the Treasury's admission that the estimated net cost of the UK's EU membership would be pounds 732m more in 1994/95 than predicted last year. Gordon Brown, the shadow Chancellor, asked him whether he had known of the revised forecast when he wrote a letter on the additional costs from the Edinburgh deal - pounds 75m next year rising to pounds 250m by the end of the century - to all MPs this month. To Opposition jeers, Mr Clarke replied: ''I honestly can't remember.''
Inside Parliament, page 2
Lord James decides, page 8
Norway votes, page 12
Letters, page 15
Mark Lawson, page 16