Steve Richards: The Tories who wanted shot of Europe are drawing it ever closer

In spite of themselves, the Conservatives have moved a step closer to being sensible about Europe. In a bizarre twist, a Europhile has topped the ballot of the most Eurosceptic parliamentary party in British history. Whatever happens next, the Conservative Party will never be quite the same again.

If Ken Clarke wins or comes a close second he becomes a much bigger player. This is bound to have an impact on the substance and tone of his party's approach to Europe. For the last four years Clarke has managed to maintain a high profile, but only because of his past record as a heavyweight cabinet minister – and his charisma. Because of his attitude towards Europe, his power base in the Conservative Party was small, and getting smaller. On the basis of his internal support he should have been given very little media prominence. Quite suddenly, the Conservative MPs have given him that power base. His ubiquity on the airwaves is well-deserved again.

The focus on the dramatic exit from the race of Michael Portillo has meant that this much more interesting development has been overlooked. I almost have to pinch myself as I write: Clarke won the ballot of MPs by several votes. When he declared his candidacy there was much talk of a crisis scenario in which he was victorious in the ballot of party members, imposing him on a parliamentary party where he had come a very poor second. This will not happen now. If Clarke wins in the country, he will have topped the two main ballots – of MPs and party members.

Of course, it can be argued that those MPs who voted for Clarke were doing so for tactical reasons, and that a majority of MPs did not vote for him at all, but that would have applied to any victorious candidate. At the very least, it provides him with a fig-leaf on the Today programme as he argues for a more moderate approach towards Europe: "John, you say I don't have the support of my MPs. I did actually come top in their final ballot."

But his victory is more than a fig-leaf. The outcome shows that some Conservatives are willing to relegate Europe in their list of priorities. This is progress for a party that has been obsessed by the subject for more than a decade, the first sign that it is learning something from two massive landslides.

There should be no obfuscation on this. Europe has been the fatal divide in the Conservative Party. Portillo's social liberalism was something of a red herring. Both the main parties have their social liberals and their authoritarians – their Mo Mowlams and their David Blunketts. Clarke himself is a social liberal, and while Iain Duncan Smith will not turn the party into the "sex, drugs and rock'n'roll" machine dreamed of by some Portillistas, he will not be stridently authoritarian.

No, it is Europe that is killing the Conservative Party. Clarke's progress suggests that there is an appetite among some members to keep the beast alive. No doubt, if Clarke were to win, some anti-euro fanatics would leave the party, but that would inevitably make it even less of a Eurosceptic haven. If Duncan Smith were to win, some Clarkeites would defect, fatally wounding his new party. More likely, therefore, Duncan Smith would tone down dramatically his approach to Europe in a bid for party unity.

What is becoming clear from the leadership contest is that the Conservatives will never again be self-confidently strident in their Euroscepticism. Either they will be nervously muted – "yes, I am anti-euro, but I really know that I should be talking about schools and hospitals ... and, of course, we respect the views of people such as Ken Clarke" – or the party will have a pro-European as its leader.

In time, this will be good news for the Conservative Party, whose virulent Euroscepticism – it may have noticed – has coincided with two landslide defeats. More immediately, the change is good news for Tony Blair who is making the first tentative steps to changing the debate over Europe. So far, the steps have been so tentative that hardly anyone has noticed. Indeed, Gordon Brown's Mansion House speech last month was seen, wrongly, as a signal that joining the euro in this parliament was out of the question.

The new Labour Party chairman, Charles Clarke, put it very differently to me in an interview for The Independent on Sunday a fortnight ago. He described the euro as the "defining issue for this Parliament". Senior politicians do not describe a policy area as a "defining issue" if they plan to do nothing about it.

The Government's strategy is to clear the ground of irrational anti-European hysteria, so at least it is possible to consider joining the euro halfway through this Parliament. Over the next two years, ministers will put the case for Europe and European reform far more relentlessly than they dared to do in that neurotic, nervy first term. Jack Straw will be making a speech this week stressing the importance of bringing EU institutions closer to the citizens of Europe, making them more accessible and relevant. But significantly he will stress also that other EU leaders share this objective, including those accused in Britain of mad Euro-zealotry.

Ministers have also started to outline more expansively the benefits of joining the euro. There were some surreal reports last week surrounding a speech made by Peter Hain, the new Europe minister. Over-excitedly, the newspapers reported that Foreign Office officials urged Hain not to mention the euro in his speech. This would have been mildly interesting if Hain had not mentioned the euro, but a significant section of his speech was devoted to it.

While stressing that there would be no rush to join, he put the case for entry at greater length than I have heard from a minister in this Government – the transparency of prices around the eurozone, increased certainty for companies, cheaper travelling costs. This was not a speech from a Government that has decided to rule out a referendum in the second term.

Now, out of the blue, comes a helping hand from the Conservative Parliamentary Party. Whether Ken Clarke wins or not, some Conservatives are becoming less strident and less self-confident about Europe. It will not be the only factor. It will not even be a decisive factor. But the Conservative Party has made it more likely than before that there will be a referendum on the single currency before the next election.