We wrecked the party in the past 10 years on Europe and headbangers on either side will wreck it again if we let them

Ken Clarke

Mr Clarke told a news conference on Wednesday that public services must be put before Europe - and said he brought in many of the major post-war reforms to schools and hospitals.

Meanwhile, Mr Duncan Smith has already set off on the campaign trail in almost presidential style, flying to Shropshire by helicopter to speak to an audience of party activists.

All 330,000 party members now have a chance to vote for the two surviving contenders in a postal ballot with the result announced on 12 September.

Ballot recriminations

Recriminations have already started over Tuesday's final secret ballot of MPs.

There are reports that a member of Mr Portillo's campaign team defected at the last minute to Mr Duncan Smith, who beat the shadow chancellor by one vote.

It appears the pro-euro Mr Clarke was boosted by Eurosceptic supporters of Mr Duncan Smith desperate to stop Mr Portillo.

Michael Portillo plans to abandon frontline politics

Some senior party members fear the deep divisions over Europe could tear the party apart.

There are reports of some Eurosceptic members saying they will resign if Mr Clarke becomes leader, with some on the left threatening similar action should Mr Duncan Smith win.

Unity

Mr Clarke told his news conference that the same people on the right now threatening to leave the party over Europe were those recently calling for unity.

"We wrecked the party in the past 10 years on Europe and headbangers on either side will wreck it again if we let them".

Later, Mr Clarke suggested party members faced a choice between his "reforming agenda" and the "status quo" favoured by his rival.

"Iain is very conservative with a small 'c' in his approach and my background is certainly reforming Tory, I think," he told journalists at a media lunch.

"It is two wings of the party that have co-existed as long as I have been in politics and what the electorate has to decide is which emphasis they are going for."

MPs final vote

Ken Clarke - 59 Iain Duncan Smith - 54 Michael Portillo - 53

Mr Clarke claimed he was a "policy wonk", who as a minister was responsible for such major innovations as exam league tables, the inspection service Ofsted and grant-maintained schools.

He stressed his commitment to a high-achieving state education system that provided equality of opportunity and an NHS free at the point of use.

And he insisted he was not attacking William Hague, who had been faced with an "almost unleadable" party in 1997.

Bernard Jenkin, campaign manager for Mr Duncan Smith denied the shadow defence secretary was out of touch with the modern world.

He said his team had radical ideas on health and education and was not obsessed by Europe.

Name calling

"The only person who is name calling on Europe is Ken and I don't think the Conservative party wants to get dragged down that road," he said.

Portillo supporters fear divisions despite the words of Mr Clarke, who has again appealed for Mr Portillo to reconsider his decision to quit frontline politics.

Conservative vice-chairman Steve Norris suggested he might quit the Tories - or even defect to another party - if Mr Duncan Smith became leader.

Asked by BBC Radio Five Live whether he should not accept the democratic choice of his party, he said he had a right to look at all parties to see which one reflected his views.