Sir George, 61, one of the most persistent thorns in the Prime Minister John Major's side, immediately threatened a legal challenge against the vote, which he lost by 272 to 213, to remove him as the official Conservative candidate in the forthcoming election.
The battle threatens to split the constituency down the middle and could engulf the Tory party at the Commons. And, the last thing the Conservatives want is a legal dog fightin the run up to the general election.
Sir George, who successfully fought off an attempt to replace him on 28 June, said he would use the trust laws to challenge the decision on the grounds that the offices of the association acting as trustees failed in their duty to ensure an impartial vote.
He claimed that 81 new members were signed up in the past month for pounds 1 per head in order to pack the first vote last night to pass a motion of no confidence in him. That opened the way for a second vote to deselect him.
There were rumours that Sir George, regarded by some Tories as a troublesome Euro-sceptic, would stand as an independent Conservative but they were flatly denied by his friends.
The MP has held the seat since 1974 and had a majority of 17,664 at the last election. It is therefore one of the safest seats in the country for the Tories.
Senior party figures rallied behind Sir George last summer to avoid the party being damaged by his deselection. But they decided he had gone too far at Christmas when he wrote an article describing Mr Major as Kenneth Clarke's "ventriloquist's dummy" over the single currency.
Sir George said: "I am very disappointed by this result. It is triumph of spite over loyalty. I made clear to the meeting I have grave misgivings over the constitutional propriety of this procedure ... I have reserved the right to take whatever legal advice may be necessary."
He also said he was not happy that it was triggered by a vote involving pounds 1-per-head entrists, adding: "Nor do I believe it is natural justice to arraign a man on the same charge twice."
A senior Conservative Party source said: "We have now got to put this behind us and unite together. It has never been regarded as a left-versus- right issue. It was an issue of loyalty to the Prime Minister."
Katherine Mitchell, one of Sir George's supporters, said he should accept the vote because it would be damaging and "silly" to carry out the threat of a legal challenge. But other supporters said they were "disgusted" with the tactics to get him out.
Jean Aslet, who voted against Sir George, said: "I think it's being very damaging. It's going to be very difficult to reunite for the general election."Reuse content