Clarke forces his rival to say 'never' to Euro

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Kenneth Clarke seized the initiative in the Tory leadership contest last night after he forced Iain Duncan Smith to admit he would "never" take Britain into the euro.

In the only live TV debate in the contest, Mr Duncan Smith told the BBC's Newsnight that he would harden William Hague's stance on the single currency to rule it out for good.

Mr Clarke accused the Tory defence spokesman of being the most "europhobic" MP in the party and reiterated his charge that his rival could not win back the six million votes needed to win a general election.

Mr Duncan Smith's admission came as the leadership race descended into a battle for the soul of the party yesterday, with John Major launching a vicious attack on Baroness Thatcher and her record.

The civil war over Europe that has dogged the Tories for the past decade reignited once more as grandees accused each other of disloyalty.

Mr Major accompanied his endorsement of Mr Clarke with claims that his predecessor had actively undermined his Government over Europe. Lord Tebbit immediately hit back with his own allegation that Mr Clarke had offered to act as his deputy in a leadership challenge to Lady Thatcher.

The row erupted as the party's 300,000 members received their ballot papers for the leadership contest.

Lady Thatcher electrified the contest on Monday with her own endorsement of Mr Duncan Smith and a scathing assessment of Mr Clarke's abilities. But it was Mr Major's intervention that caused most controversy, with a BBC radio interview in which he attacked Lady Thatcher's economic record and her role in supporting Eurosceptic rebels.

Lady Thatcher caused "unprecedented and immense" damage to his administration by encouraging backbenchers, including Mr Duncan Smith, to rebel, Mr Major said.

Mr Major hailed the former Chancellor as "the best option for ensuring we win elections" and warned that his rival was "very Eurosceptical".

Speaking on BBC Radio 4's Today programme, he added: "Margaret wasn't very helpful during the 1990-97 period... I think she forgot some of the difficulties she left behind."

Mr Major also later denied claims that he had offered Mr Duncan Smith a government job and that the Chingford MP had turned it down because of their differences over Europe. He told BBC1's Six O'Clock News: "I can tell you categorically that at no stage did I offer Iain a job in the government."