Mr Clarke failed in his third and final attempt to win the leadership of his party. Allies said the elimination of the former chancellor sent a "terrible signal" to the country because opinion polls among the public had consistently showed he was the man most likely to lead the party back to power.
David Davis, the early front-runner, topped the poll with 62 votes - five less than the number who publicly declared for him and only six votes ahead of Mr Cameron, the party's fast-rising star, who has shot from outsider to bookmakers' favourite in two weeks.
Mr Davis now faces a strong challenge from Liam Fox, who won 42 votes, for a place in the shoot-out of two candidates who go into the decisive ballot among the party's 300,000 members. MPs vote again tomorrow to choose the shortlist, and the result will be announced on 6 December.
Supporters of Dr Fox, the shadow Foreign Secretary and a right-winger, were jubilant after he did better than expected. They declared that Mr Davis was a "sell share" and predicted a run-off between Dr Fox and Mr Cameron.
Dr Fox may have benefited in yesterday's secret ballot from a "stop Clarke" campaign of tactical voting by Eurosceptics. Mr Clarke suffered the crushing blow of coming fourth with only 38 votes.
Alistair Burt, a member of the Clarke campaign, said: "Ken Clarke is the most popular Conservative in the country and he isn't even on the ballot form! He is the best leader this country never had."
John Bercow, a former Shadow Cabinet member, said: "A lot of our members will be extremely disappointed that they will not have a chance to vote for Ken. For him to be eliminated in the first round sends a very sad and worrying signal to the electorate. Some people simply can't accept being led by someone committed to Europe. The party has to decide whether it wants to win or not."
Although Labour fears the fresh appeal that Mr Cameron would offer, ministers were relieved that the heavyweight bruiser Mr Clarke was knocked out. "When will the Tory party ever learn?" asked a senior Labour whip.
Mr Clarke drove himself away from Westminster after admitting he was "disappointed" by the result. "It sends a message that they are looking for a younger leader, probably," he said.
The undoubted winner was Mr Cameron, the 39-year-old shadow Education Secretary, who looks set to top the poll in tomorrow's second round, an endorsement that would send a powerful signal the party's grassroots. "David Cameron has won," said a member of Mr Clarke's team. "I can't see many of Ken's votes going to Fox or Davis."
Mr Cameron will try to persuade the 38 MPs who backed Mr Clarke to switch to him as the only moderate candidate still in the race. He may offer Mr Clarke a top Shadow Cabinet post in an attempt to win his public support. He won the immediate backing last night of Sir Malcolm Rifkind, the former foreign secretary, who withdrew from the contest last week and voted for Mr Clarke yesterday. "The more I have seen and heard of David Cameron, the more impressed I have been by his ability to provide the leadership that the Conservative Party needs both now and in the future," he said.
The Cameron camp also hopes to win some defections from Mr Davis - as does the Fox campaign. Some MPs who publicly endorsed Mr Davis may feel they have kept their word by backing him in round one but may now desert him.
Mr Cameron said: "It is a good result - it is better than I expected. My team have worked incredibly hard. We have had a very good response from members of the public, from MPs, from party chairmen, from party members and it is a very pleasing result."
Tory MP Boris Johnson, who backed Mr Cameron, said: "It's very, very good news for Cameron. He's going to storm through, I've absolutely no doubt and I've no doubt he's going to be Prime Minister."
He said of Mr Clarke: "He's a huge man and he's a great man in politics. It's very sad but Cameron represents a new generation."
The other winner yesterday was Dr Fox, 44, who said there was a sense that the leadership was passing to "a new generation" - and hinted that Mr Davis, 56, was not part of it.
"This is an extremely good result. I am delighted to have polled well above predictions. I go into the next round with real momentum," he said.
Chris Grayling, campaign manager for Dr Fox, said: "David Davis's campaign has gone into reverse and the opportunity has now arisen for us to become the champions of the right. David Cameron is going to get into the run-off. We need to look at who has got the momentum to beat him."
Another supporter of Dr Fox said: "The skids are under Davis. We can overtake him. Backing Davis will be a wasted vote because he can't beat Cameron."
Mr Davis put a brave face on the result, hinting that right-wingers had backed Dr Fox to stop Mr Clarke getting through.
"I came top of the poll," he said. "I got the largest number of votes. There was obviously some tactical voting. It is very important that my colleagues give the clearest signal to the country who they want to see as leader."
The shadow Home Secretary dismissed speculation that his support was on the slide. He said it was "extremely unlikely" that any of his backers would shift to Dr Fox, but admitted there could be a "lot of movement of votes".
Damian Green, a Davis supporter from the left of the party, said there had been "no haemorrhage" of support from Mr Davis and was confident that he would make the run-off.
The result was announced in Commons Committee Room 14 at 5.30pm last night by Sir Michael Spicer, chairman of the 1922 Committee.
Allies of the four contenders anxiously awaited the result after all 198 Tory MPs trooped into the room between 1pm and 5pm. Only the Cameron camp looked relaxed, confident that their man would not be eliminated. The Davis campaign feared it would suffer the setback it wanted to avoid by winning less than 67 votes, while the teams of Mr Clarke and Dr Fox feared fourth place and "sudden death". As the day wore on, the jitters in the Clarke camp increased as some of his likely backers switched to Mr Cameron, while the Fox team sensed an opening for their man that could now propel him unexpectedly into a run-off against Mr Cameron.
And then there were three...
David Davis, 62 votes
David Davis, 56, was in danger of being squeezed out as part of a vicious "generation game" by his two rivals, David Cameron and Liam Fox. Both took a sideswipe at him last night by pointing out that the party had signalled it was ready to choose a younger leader after the decisive rejection of Ken Clarke, 65. Mr Davis, nicknamed "Action Man" for his reputation as a former SAS reservist and his love of long-distance walking, is now out to prove that he combines the experience and fitness to lead the Tory party back to power. However, his votes slid from 67 pledges to 62, as momentum for him stalled. There is nervousness in his camp that more votes could haemorrhage.
David Cameron, 56 votes
David Cameron was trying to persuade Tory MPs to skip a generation and reject David Davis last night. He began meetings with supporters of Ken Clarke to try to win their 38 votes before tomorrow's ballot. Senior members of Mr Clarke's team privately made clear they were ready to switch their votes to Mr Cameron. Michael Mates, a former Northern Ireland minister and Clarke supporter, said that he would back Mr Cameron. Jubilant supporters are convinced that he can now win the leadership, having started the race as outsider. One former minister said: "Remember what happened to Michael Portillo. He came top, and then couldn't get any higher."
Liam Fox, 42 votes
For an outsider, Liam Fox had good reason to be pleased with himself after surviving the first round and staking a claim to replace David Davis as the leader of the right.
He wasted no time in sending a message to Mr Davis's supporters that their man is on the slide. "It is difficult once your support starts to slip and you start to under-perform to get your momentum back."
Dr Fox had 24 MPs publicly committed to voting for him when the ballot started. Some of his extra 18 votes came from right-wingers who wanted to see Kenneth Clarke eliminated.
Dr Fox's weak spot is that he has little prospect of picking up support from MPs who backed Mr Clarke.Reuse content