Duncan Smith goaded for Thatcher's outburst

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Iain Duncan Smith was taunted in the Commons yesterday over whether he supported a call by Baroness Thatcher for Britain to start withdrawing from the main elements of the European Union's common policies.

The Tory leader refused to respond when Tony Blair challenged him about an outspoken attack on the EU by the former Prime Minister. Lady Thatcher's intervention undermined the painstaking attempts by Mr Duncan Smith to weaken his party's obsession with Europe and to focus on public services.

Mr Blair said Mr Duncan Smith failed to "disassociate" himself from Lady Thatcher's comments, arguing that the Tories were moving "further and further" against Europe.

Mr Blair said: "To talk about withdrawal and rule out the single currency whatever the circumstances is not an act of patriotism, it is an act of folly."

The timing of Lady Thatcher's remarks was unfortunate for the Tories and helped to blunt Mr Duncan Smith's attack on the Prime Minister, who was reporting back to the Commons after the EU summit in Barcelona at the weekend. Lady Thatcher has returned to haunt the Tory leadership in a new book, Statecraft, in which she declares most of the problems the world had faced, including Nazism and Marxism, come from mainland Europe.

She called for Britain to renegotiate its terms of EU membership so it could pull out of the common agricultural and fisheries policies, the joint foreign and security policy and to regain domestic control of trade issues. She writes: "It is frequently said to be unthinkable that Britain should leave the European Union but the avoidance of thought about this is a poor substitute for judgement."

Tory Eurosceptics have always seen demands for a renegotiation as barely disguised code for withdrawing from the EU, knowing that Britain's EU partners would never agree.

Mr Duncan Smith, a backbench rebel against the Maastricht Treaty during John Major's government, supports a renegotiation of the EU's governing treaties and has made clear he would never take Britain into the euro. But he has deliberately adopted a low-key approach to Europe since becoming his party's leader last September in an attempt to show the Tories have "moved on" from their disastrous campaign in the general election, when William Hague focused on Europe but barely addressed issues such as health and education.

Mr Duncan Smith ended his reticence on Europe by rushing out an article in The Sun on Saturday as a pre-emptive strike – ahead of Lady Thatcher's book – to stress his own Eurosceptic credentials. He wrote: "Unlike Mr Blair, I will not declare my love for the pound and then scheme to scrap it. While I lead the Conservative Party, I will always fight to keep the pound."

His tone contrasted with a more emollient line adopted by Michael Ancram, the shadow Foreign Secretary and deputy Tory leader, in his first speech on Europe last Wednesday. He sought to reposition the party as "constructive Europeans" who believed in the sovereignty of the nation state.

Although Tory officials played down Lady Thatcher's remarks, senior party figures said privately the words would not help Mr Duncan Smith's bid to modernise his party. "It's the last thing we need," said one senior Tory MP. "Some people never learn. We fought the general election on Europe and look what happened."

Ian Taylor, the Tory MP and chairman of the all-party European Movement, said: "The reality is not as Margaret Thatcher sees it. It would be a disaster for us to try to withdraw from what she helped to create. Her remarks are dangerously misguided, she has lost herself somewhere in the mid-Atlantic."