The Corn Laws divided the Tories for 25 years; today they are just as split on Europe

The Tories are as split over Europe as they were over the Corn Laws, which divided the party for more than 25 years in the last century, a Cabinet source told The Independent yesterday.

The source added the warning: "Disunited parties can't expect to win elections." He said that Labour was just as divided as the Conservatives, but was better at concealing its rifts. Dissident Conservatives had been causing difficulties for years, but they had become more prominent because of the smallness of the Government's majority, and because of their promotion by some newspapers.

The frank confession of the depth of the Tory rift was delivered as the Foreign Secretary, Malcolm Rifkind, opened the second day of a Commons debate on Europe - with a blunt warning to Brussels that any Conservative government would press for a multi-tier Europe.

He told the House that Jacques Santer, President of the European Commission, had said that the hour of truth was approaching when the United Kingdom "would have to decide whether it believed in Europe as a free-trade area, or as a political union".

"It is reminiscent of choices which used to be urged upon British governments: Commonwealth or Europe? America or Europe? These have always been false choices because reality lies between such poles."

The European Union was more than a free-trade area because of the single market, backed by supranational rules and institutions such as the European Court. "But if Europe is more than a free-trade area, it is also less than a federal state and must remain so," he said.

Mr Rifkind argued for a flexible approach to EU development, with different groups of nations taking different approaches to different issues.

Robin Cook, Labour's foreign affairs spokesman, mocked the Government's efforts to get the EU's worldwide ban on British beef lifted and claimed that it was inept at doing business with Europe. "Standing on the sidelines, shouting through a megaphone how much you disagree with everyone else, isn't a posture of strength. It exposes how weak your bargaining position actually is," he said.

The Government was aiming to use the same tactics for the Dublin summit, he said. Pressed by Euro-sceptics on both sides of the House, he said a Labour government would not sign up to a single currency if there was "grotesque fudging" of the convergence criteria for entry.

John Redwood, former Conservative leadership challenger and MP for Wokingham, said Britain should be proud to be part of Europe, but it was "our continent and not our country".

"It is quite wrong to suggest that no power would transfer from this country if we abolished the pound and joined a single currency," he said.

A senior government source said yesterday that there was no question of John Major vetoing an inter-governmental conference agreement at Amsterdam next June - because votes were never taken.

If the Tories won the next election, it would be clear to EU partners that Britain would reject a package that did not meet Mr Major's requirements on fisheries quota-hopping and the use of health and safety rules to introduce "backdoor" measures such as the 48-hour working time directive.

The source said that if Labour won the election, they could be expected to sell the pass on qualified majority voting and the social chapter, but Mr Major would resist any such proposals. As any new treaty would require unanimity there would be no new treaty until he was satisfied on all fronts.

Mr Rifkind told the House last night: "The Opposition, through their inexperience and naivety, have become a menace to Britain. They are weakening Britain's position in these crucial negotiations by encouraging other governments to wait until after our general election in the hope that some of their crucial negotiating objectives will then fall into their lap."