Europe 'could cost Tories the next election'

Rebellious Tory MPs were warned yesterday by a former deputy party chairman that they could cost the Conservatives victory at the next general election unless they got the subject of Europe "into proportion".

Lord Ashcroft, a major Tory donor, spoke out as fears grow within the party that they could be haunted by the issue for years. David Cameron experienced the largest revolt ever suffered by a Conservative premier when 81 of his MPs backed a referendum on the European Union – and Eurosceptics have warned the dissent is only beginning.

The Spectator today reports that two Cabinet members – Iain Duncan Smith and Owen Paterson – were "miserably unhappy" at Mr Cameron's handling of the vote. Lord Ashcroft, who has conducted research into the Tories' failure to secure an overall victory at last year's election, described the rebel MPs' behaviour as self-indulgent.

"Monday's display was damaging because it suggested to voters that the Conservatives are far away from them when it comes to priorities," he wrote on the website conservativehome.com. Lord Ashcroft said voters were close to the sceptical Tory attitude to the EU, but that the issue was far less important to them than the economy, jobs, the health service, immigration and crime.

The peer warned that the rebellion, and the focus it had put on Tory splits over Europe, had made election victory less probable. He said: "Those who want to see an undiluted Conservative government after the next election should be the most committed to getting the issue of Europe into proportion. It is futile to say we want to gain the extra support we need to win, and then act in ways that make victory less likely."

During Prime Minister's Questions yesterday, Ed Miliband, the Labour leader, seized on the Tory divisions. Mr Cameron retorted by highlighting his opponent's recent refusal to rule out ever taking Britain into the euro. The Prime Minister said: "That's the split – the Labour Party and reality."

The Labour leader accused Mr Cameron of making empty promises by reassuring his MPs that he intended to claw back powers from Brussels.

The Prime Minister retorted that the Liberal Democrats wanted "some rebalancing" of powers between Britain and the EU, the Tories wanted "a lot of rebalancing", while Mr Miliband was "a complete mug who wants no rebalancing at all".