The temporary climb-down, following pressure to stay on from his constituency officials and Sir Norman Fowler, the party chairman, removes the immediate threat of a by-election that could have seen the Government's overall Commons majority reduced to 15.
But it leaves John Major and government whips with the problem of controlling the unpredictable Euro-rebel for the next year, during which the Prime Minister must push through a Bill to increase Britain's financial contribution to the European Union.
Sir Richard, 66, MP for Holland with Boston, who was labelled a 'barmy' by Mr Major in remarks during his recent Far East tour, had threatened for some weeks to resign and take up a publishing contract.
The Prime Minister was reported to have said: 'When I hear the name Body, I hear the sound of white coats flapping.'
A fervent Maastricht treaty rebel who believes Britain should never have entered the European Community, Sir Richard denied last night that the remarks had upset him. 'I don't give a fig about that,' he said, although constituency officials are believed to have pressed Sir Norman Fowler for an apology.
He is also unhappy about Mr Major's determination to discipline dissidents, and believes whips have threatened rebels with withdrawing the party whip, which prevents re-adoption by local parties at elections. He has also questioned government economic policy and with a group of economists is preparing a pamphlet claiming the economy is heading for mass unemployment.
His local party was delighted at the decision, revealed after a special meeting with constituency officials.Reuse content