Senior Tory moderates, some in the new leader's own camp, have asked Mr Hague not to offer a prominent role to Mr Duncan, a long-standing friend.
They claim his views, including a belief that heroin and cocaine should be legalised, might prove embarrassing.
"He thinks of himself as the Conservative Party's Mandelson but he neither has the ability nor the charm," one MP said.
Even his detractors agree, though, that Mr Duncan has run a good campaign. For this he can expect a reward.
A hard-line libertarian right-winger and Euro-sceptic, Mr Duncan once said: "I've been a Conservative since my balls dropped." The son of an RAF officer, he was president of the Oxford Union and a Kennedy scholar at Harvard. Before he became MP for Rutland in 1992, he offered his Gayfere Street home in Westminster to John Major as headquarters for his 1990 leadership campaign. It is said he did this as a favour William Hague.
Four years later, he was forced to resign as Parliamentary Private Secretary to Brian Mawhinney when it emerged he had lent money to his next door neighbour so that he could buy his home at a discounted pounds 140,000 from Westminster Council. The affair was nothing more than a "temporary hiccup" in his career, he later said.Reuse content