In a scathing rebuttal of Mr Hague's fears of a federal future, the former Tory cabinet minister warns that Conservatives are in danger of becoming a "party of dinosaurs" by clinging to outdated EU perceptions.

Sir Leon, who is a European Commission Vice-President, says the Tory leadership requires "clear-sightedness and courage" to avoid such a fate.

His speech to RA Butler Lecture at the Carlton Club is the strongest response so far to Mr Hague's passionate denunciation of the European Union in an address in Fontainebleau last week.

Mr Hague said the EU was "near the limit" of political integration and many of its leaders were sticking with "50-year old solutions" to Europe's modern problems.

Economic integration was a recipe for disaster and real pro-Europeans opposed further union.

But Sir Leon says bluntly that Mr Hague doesn't know what he is talking about.

He is expected to say: "I assume that everyone, including the most ardent pro-European or the most vociferous opponent of European integration, will agree that any policy must be based on an accurate understanding of the European Union as it has evolved since its inception in the 1950s.

"To arrive at a credible European policy it is essential that we operate on a broad consensus of what the EU is and what it is aiming to become.

"My greatest concern is that the characterisation of the European Union, elegantly set out in William Hague's speech, simply does not stand up to examination."

He accuses Mr Hague of painting the EU as heading towards a corporatist state-centred, integrated European state "administered by unaccountable officials" in Brussels.

"He (Mr Hague) suggests that the EU is a victim of outdated thinking forged in the 1950s to tackle the problems of the 1940s.

"By contrast I strongly believe that the characterisation of the EU in these terms is a fundamentally flawed anachronism itself.

"In many ways William Hague is applying a 1980s vision to a simplified caricature of the EU of the 1970s.

"It is not Europe that is out of date, but the perception of what is actually happening in Europe today."

Sir Leon says in his speech that people should not be sidelined by a "shrill and emotional" reaction to the single currency, nor by a "simplistic, big-bang" idea of EU enlargement.

He adds: "The Conservative Party must respond to the way the world is, not the way some might imagine it is or should be.

"It would be a shame of tragic proportions if the party were to tread the European stage out of touch with reality and dislocated from the future.

"Then, the Conservative Party would truly become a party of dinosaurs."

This strongly-worded speech comes as Mr Hague's personal rating is reported to have dropped among Conservative voters.

A MORI poll just out suggests Mr Hague's now standing at minus 25 points among his own supporters, a figure reached by subtracting those dissatisfied from those who are satisfied with his performance.

The previous month's figures pointed to Mr Hague's personal rating standing at minus 15.