Tory Eurosceptics used her remarks that Britain's EU membership was an "absolute disaster" to put pressure on William Hague to toughen his stance on Europe. Demanding an "urgent" clarification of Tory party policy, William Cash, the MP for Stone, said: "It should be based on the policy of renegotiation of the Maastricht and Amsterdam treaties.
"The issue is a matter of principle. You have to prepare for this well in advance of the return of the Conservative Party to government."
But a spokesman for Lady Thatcher's office played down the remarks, saying: "We never comment on this sort of dinner party tittle-tattle, which is what we regard it as. Lady Thatcher is a forthright person and when she has something to say, she will say it."
A Tory insider said that Lady Thatcher, who is on holiday in the United States, has made clear in private for "quite some time" that she wanted Britain to pull out of the EU.
The Foreign Secretary, Robin Cook, issued a joint statement with Menzies Campbell, foreign affairs spokesman for the Liberal Democrats, deploring Mr Hague's party for failing to reject Lady Thatcher's reported views. They demanded the Tories "slap down Lady Thatcher's outdated prejudices and state once and for all that there is no room at the top of British politics for those who think Britain should leave Europe".
But yesterday the Tory leadership tried to quell the controversy. John Maples, the Conservatives spokesman on foreign affairs, insisted that the position "to be in Europe but not run by Europe" would not change.
Demands for "renegotiation" have long been seen as a smokescreen for Eurosceptics who want Britain to pull out of the EU altogether. And the renewed Tory divisions now threaten to dominate the party conference in October.
The dispute will be inflamed by the publication of the memoirs of Lord Lamont of Lerwick, the former Tory chancellor who presided over the events of Black Wednesday in 1992 when Britain pulled out of the exchange-rate mechanism and who aired the possibility of Britain's withdrawal from the EU at the 1994 party conference.
John Major's autobiography, which will describe Lady Thatcher's interventions during his premiership as "intolerable", is also due to be published that week.
Michael Heseltine and Kenneth Clarke, two of her former cabinet colleagues, will also break ranks with Mr Hague's leadership and address a conference fringe meeting of the pro-single currency Britain in Europe campaign, which is headed by Tony Blair.
Donald Macintyre, Review, page 3Reuse content