The former chancellor Kenneth Clarke delivered a stinging attack on Iain Duncan Smith's flagship policies on tax and Europe yesterday.
At a fringe meeting organised by The Independent, Mr Clarke also ruled out joining the Shadow Cabinet, saying he wanted to argue for the policies he believed in.
David Davis, the shadow Deputy Prime Minister, called for Mr Clarke to rejoin the front bench, but Mr Clarke said he would "probably" decline. He said: "Sometimes I agree, and sometimes I don't agree with where we are going."
Mr Clarke appealed for unity and an end to the bitter factional in-fighting within the party. But, speaking to a packed meeting, he immediately criticised Mr Duncan Smith's pledge last weekend to cut tax rates, warning that they could not be reduced until public spending and borrowing were brought under control.
He predicted that the Tories could win the next election, but warned that the party had to get away from "this sense of crisis, which others would wish upon us".
Mr Clarke told the audience of about 500 people: "We've got to be credible about lower taxation and public spending and how we can move on to improve the public services. I personally believe the first priority of whoever takes over from Gordon Brown will be getting spending and borrowing under control. The first thing to do is produce a stable economic situation and do so without damaging public services. Tax cuts come after that. Tax cuts come when you've got public spending and borrowing under control."
He also clashed with the party's demands for a referendum on the new European Union constitution, demanded a return of council tax capping and renewed his criticism of the decision to go to war in Iraq.
Mr Davis won loud applause when he demanded a referendum on the proposed constitution, but Mr Clarke issued a withering critique of Conservative calls for a vote.
He said: "The first thing I would like to see is what is in this treaty and whether it matches my vision of what the EU should be like ... If you are going to vote 'no' whatever the text is, what are you going to do when you have voted 'no'? Are you going to leave? I'm not quite sure. Are you going to have a non-rules-based, non-super-national European Union?
"This treaty strengthens the Council of Ministers, which is nation states, gives more to the European Parliament, gives more power to national parliaments and greatly weakens the Commission."
Mr Clarke also backed the concept of central government targets, while calling for a radical cull of Labour's culture of target-setting. He said: "The public are more desperate to see an alternative government to the present one than they were this time last year.
"Our need now in opposition, having been thrown out so firmly six years ago, is to come up with a body of policy which is credible and makes it clear to people how we are going to deliver our objectives."
On Iraq, he renewed his criticism of the decision to launch military action. He said the Hutton inquiry was a "tasteless tragic sideshow" about the war between the Government and the BBC, which had diverted attention from the wider question of why Britain went to war.
Mr Clarke told members he remained an advocate of council-tax capping, and warned them not to take the concept of local accountability to extremes.
He said: "You need some targets, you don't need hundreds of them. It is correct to target that you have shorter waiting times, it is correct that you target higher detection rates from crime, it is correct that you target numeracy and literacy and some academic attainment in schools, otherwise what are the public to do if their own local provider just fails to deliver?"
He warned that in-fighting had dogged the party for a decade. "You will not make progress if you continue to have factions plotting. They made a fair old mess of the Major government and they will make a fair old mess of opposition if the same little group just repeats," he said.
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