While saying the Tories must display more compassion than they showed in their 18 years in power, the former cabinet minister warned William Hague not to forget the party's achievements as he said "sorry" for their mistakes in government.
In an interview with The Independent, Mr Portillo said: "Sleaze was obviously damaging to us; we joined and left the European exchange rate mechanism All these things are matters for an apology. But we must also remember what things we got right and to hold on to them. Maybe we need to go back to our roots rather than throw them overboard as Labour did in opposition."
Conceding that Tony Blair had invaded the Tories' natural territory, he insisted Mr Hague must recapture it rather than reposition the party on new ground, "If you find someone squatting in your house, the thing to do is evict him, not look for another house."
Mr Portillo, the most spectacular casualty of the Tory rout in last year's general election, when he lost his Enfield Southgate seat, was speaking before the start on Sunday evening of a three-part series on Channel 4 in which he examines the causes of the defeat and starts to map out a new agenda for his party.
Worryingly for Mr Hague, the most striking lesson Mr Portillo drew from his five months making the programmes was the Tories' continuing unpopularity. When he filmed a "focus group" of former Tory voters, he found their impressions of the party just as negative as they were at the election. "That was the biggest disappointment," he said.
He believed the party's most urgent task was not to announce new policies but to change its image so it looked "reasonable, sympathetic, attractive and united". He hoped Mr Hague's frontbench team would be strengthened by the arrival of some new faces.
Although still sketchy, Mr Portillo's policy agenda sounds like Thatcherism with compassion, but based on community-led rather than government-imposed solutions. Filming in America, he was impressed by small towns where people intervened to stop problem children turning into juvenile criminals, and brought in a tough "workfare" regime for the jobless.
He is convinced there is scope to devolve welfare, health and education to local communities, believing that the Tory reforms between 1979 and 1997 were flawed because they gave too much power to central government.
Mr Portillo is sure people want to help themselves, even in Britain's poorest areas. "The more responsibility you give to people, the more responsible citizens you get," he said.
By over-centralising, he said. the Tories had "departed from our own principles and sowed the seeds of our own destruction". Refusing to blame John Major, he said: "We were all in government; we are all responsible." He believed the "seminal moment" in the Tories' decline was the resignation of Nigel Lawson as Chancellor in 1989, after which Lady Thatcher did not have enough cabinet support - "no government can be a one-man band".
Lady Thatcher, his political heroine, declined to appear in Mr Portillo's programme; in turn, he gave her a mild rebuke for saying recently that the Tories could not win the next election. "Things can change very dramatically in politics," he said. "All members of the team really must believe that."
He will be voting "Yes" in this month's Tory ballot on the single currency, supporting Mr Hague's policy of ruling out membership in this Parliament and the next.
He declined to say whether he supported Lady Thatcher's view that the Tories should declare they would never take Britain into the euro, but his instincts are clear. Under a European-wide economic policy, Mr Portillo said, people would realise they had no influence over a bureaucratic and unaccountable body. "I understand what lies behind the European ideal but I believe we are in danger of achieving the very opposite of what its founding fathers intended. We risk tensions, conflicts and rivalries."
Mr Portillo has enjoyed making his television series, and another programme about Spain, where his parents were born, is on the way. There are benefits in being an "outsider" from the political process, such as being able to speak his mind. But asked whether he wants to be an "insider" again, he replied: "Probably."
He may be tempted by a by-election, although he knows they can be high- risk affairs. It may not be easy for him to make a personal comeback. Peter Mandelson, the Trade and Industry Secretary, explains in the programme why he and Mr Portillo both have an image problem, saying the majority of politicians are fence- sitters who "creep around in the undergrowth" to maintain their positions.
"The minority are the people, strong personalities, with strong views, who are risk- takers," he told Mr Portillo. "You have paid the price for being a risk- taker; so have I."Reuse content