It's like watching a dear friend hang himself

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This was the week I blinked. The European Commission had taken exception to the merger of British Airways and American Airlines which together would control over 60 per cent of total transatlantic traffic. There on television was Teresa Gorman, furious that Brussels was trying to run the country.

Now wait a minute. She and I are both Tories. We advocate free competition. That means no monopolies, no dominant market position. If Air France and other airlines protest, maybe they have a point. I grant you it's not that simple, given that most objectors are state-owned and subsidised by governments not averse to keeping out lean and hungry rivals. The Commission, an effective ally of Richard Branson's open-sky forays, needs to attack the right targets. But see how automatically "Europe" is lambasted, how readily the criticism is reported and accepted.

Meanwhile in Berlin I listened as a young Latvian politician explained that for them accession to the European Union was not a matter of economics but of survival as a nation. An Azerbaijani nodded vigorously: "Picture our life in a small oil-rich nation surrounded by unstable partners. Like Russia." Hungarians described meetings throughout their country to prepare their people for entry. A Berliner enthused over the arrival of third- party car insurance with the opening of the market in financial services which has cut costs to the German consumer by up to 50 per cent.

Bit different from the debate in Britain, isn't it? To return home and hear Mrs Gorman was depressing. The Eurosceptic view is short-sighted, ignorant and wildly out of date. With half an eye on the voters, it is designed to create "clear blue water" between us and Labour, however idiotic the result. Worse, it crowds out any sensible discussion of what's going on abroad.

I became a Conservative more than 30 years ago in part because under the premiership of Harold Macmillan it was the main pro-European party (I don't count the Liberals). Instinctively I felt that stronger links with the Continent were the way forward. As the single market has opened up we've grabbed a substantial share. When we bother to compete we're excellent at it. So the lion's share of inward investment flows to us: opposite my house in Derbyshire the second Toyota factory is under construction, built with not a penny of taxpayers' money and exporting 80 per cent of its output straight across the North Sea.

So, for Tories to advocate pulling out seems bizarre. The supporters of business turning their backs on rich customers? The advocates of law and order hurling abuse at the European judges whenever we (rarely, in fact) lose a case? The party of sound finance fighting shy of joining with the Deutschmark, the strongest currency of the last half century? This is weird. And all on the grounds of - what? Sovereignty? In the modern world, what on earth is that?

The fight can get very dirty. Last summer rumours that I was about to defect to the Liberal Democrats were published as gospel truth in such papers as the Sunday Telegraph. They were absolutely not correct. I checked with my contacts - both the Lib Dems and Labour denied convincingly that they were the source.

I pondered who might gain from such rubbish. The Eurosceptics is the answer and they were doing it to several MPs on the pro-European wing of the party in order to unsettle us, put us on the defensive, and perhaps undermine our local parties' confidence in our loyalty. Charles Moore and his ilk spend too many Friday nights at dinner parties with their Eurosceptic friends, and too few Saturday mornings checking the trails.

I made clear where I stood last month. I'm happy to fight the election on our current European policies. Though "wait and see" on the single currency is hardly inspirational, it'll do for now. What I will not accept is any shift further away from Europe, particularly any premature ruling- out of our membership. I don't mind the Prime Minister sitting on the fence on this issue. I just don't want him to fall off it.

For certain colleagues are engaged in another campaign. The next election is written off: we won't be 20 points behind on polling day, they calculate, but Blair will be Prime Minister. They're pleased about that because it'll give them time to reform the party. A fresh agenda will be drawn up, with echoes of Newt Gingrich's "Contract with America" - a sharp cut in public spending, a more nationalistic foreign policy, a more right- wing approach to the family (i.e. against single parents, gays etc). Euroscepticism - even withdrawal - is only part of the package, though naturally such distinguished and under- rewarded figures as Bill Cash and Mrs Gorman will be to the fore.

This scenario sees a period in obscurity as useful. The party conference of 1998 or 1999 will endorse the new manifesto. Then, as Mr Blair makes a mess of things, the New Tory Party will return to the electorate refreshed and invigorated and be voted back to office.

There are several things wrong with this. First, and obviously, a party many of whose MPs secretly wish to see it lose, will lose. Then there's Mr Blair. Suppose he doesn't make a mess? Constrained by Maastricht criteria, cloaked in those Tory policies which made us so electable, mightn't he end up doing rather well? And bear in mind our skewed electoral system. Right now the Conservatives need to win 2 per cent more of the vote than Labour to hold power. By 2002, because of boundary changes, the Tories could win a million more votes than Labour and still lose. And that right- wing package might turn out deeply unpopular, as it has in the US.

It's like watching a dear friend hang himself and being unable to stop it. Labour knows what this means. The capture of the party in the 1980s by Militant and by their anti-Nato, pro-CND, anti-Europe wing put them in opposition for nearly two decades. The party split in two as the pro- Europeans hived off to form the ill-fated SDP. That lesson is not lost on pro-European Conservatives. For if you quit, the party that remains is much weakened and the more easily taken over by purists. The British electoral system is brutally hostile to new entities - out there lies the wilderness. So we stay put.

The Conservatives were always the pro-European party. Activists have till now understood that, tempted as they might be to swing to the right, the voters of this country are mostly solidly in the middle. Should the party opt for more extreme policies this is likely to be only a temporary phenomenon. Sooner or later, reason and a lust for power will prevail. Then the moderates will take centre stage once more. Otherwise, I fear, we could be out for a long, long time.