The issue threatens to become the new focus of splits in the Conservative party where a growing number of MPs now favour total withdrawal.
Lady Thatcher says she was deceived into signing the Single European Act, which formalised the relationship, because she thought it was a purely economic agreement.
Her private intervention has strengthened the resolve of Tory Eurosceptic MPs - including several front-benchers - who want to toughen up the party's policy on Europe. It shows the extent of her enduring influence on the party and will increase pressure on William Hague to pledge withdrawal from Europe. The Tory leader is already concerned about calls by some MPs for Britain to leave the EU unless the terms of its membership can be fundamentally renegotiated.
There is a growing mood in the party in favour of pulling out of the EU. A survey of Tory MPs by Hull University academics, to be published later this year, found that 26 per cent advocated Britain's withdrawal. The stance was particularly prevalent among the new intake, indicating that this was the direction in which the Parliamentary party is heading.
It brings Tory MPs into direct conflict with Mr Hague who has specifically ruled out adopting such a policy and condemned those who support such a move as extremists. However, the move to strengthen the official policy is being privately supported by several members of the Shadow Cabinet. One Tory front-bench spokesman, Howard Flight, has already been publicly rebuked by Mr Hague for raising the idea of British withdrawal from the EU.
It emerged last week that 11 Tory front-benchers, including three Shadow Cabinet members, had backed a Eurosceptic group advocating a "renegotiate or withdraw" policy. The internet website for Conservatives Against a Federal Europe said that "we must withdraw ... and negotiate a series of trade treaties that allow us to do business competitively not only in Europe but throughout the world" if five demands were not met. The site - which listed Iain Duncan Smith, shadow defence secretary, David Heathcoat-Amory, shadow chief secretary to the Treasury, and Angela Browning, shadow trade and industry secretary, as supporters of the group - was wiped clean after Conservative Central Office discovered its existence.
A spokesman for the group insisted that the commitment dated from before Mr Hague became leader - but at least one front-bencher insisted that he still supported the "renegotiate or withdraw" position.
The Tory leader hoped to have halted rows over Europe by holding a ballot on his policy of ruling out joining the single currency for the life time of the next Parliament. This took the wind out of the sails of pro- Europeans including Michael Heseltine and Kenneth Clarke who want to go into the euro, but failed to deal with the party's more hardline Eurosceptics.
The Hull University study, which is likely to be published about the time of the Tory autumn conference, showed that the Conservative Parliamentary Party is becoming increasingly Eurosceptic.
It found that 61 per cent of Tory MPs believed that the European Commission should lose its right to initiate legislation. Opposition to the single currency was harder still, with 66 per cent saying that joining the euro would signal an end to Britain's sovereign nationhood, and 71 per cent disagreeing with the statement that membership of the single currency was crucial for the UK's future prosperity.
By contrast, only 3 per cent of Labour MPs supported Britain withdrawing from the EU, 29 per cent thought the commission should lose the right to push through laws, and 10 per cent thought the single currency would undermine the UK's status as a sovereign nation.Reuse content