• A long way still to go

• Making his mark

• Commons success, image failure

• Chronology

The competing wings of the party had been tearing themselves apart over the issue for years.

Feuding over Europe led to Margaret Thatcher's downfall

The feuding had led directly to the downfall of Margaret Thatcher and helped ensure the party lost the general election.

If there was one policy the new Tory leader needed to get right it was Europe, and particularly the stance on membership of a single European currency.

Mr Hague was known to be sceptical about the benefits of a single currency and the party had chosen him as their leader over the arch pro-European Kenneth Clarke.

But he started to go further within months of being elected. First he abandoned the carefully-crafted "wait and see" compromise hammered out by the shadow cabinet. Instead he ruled out taking Britain into the euro for at least a decade.

Unnecessary and damaging

Heseltine infuriated by the move

The move infuriated Europhiles like Michael Heseltine and Kenneth Clarke who claimed the move was unnecessary and potentially damaging.

He even lost two of his frontbench spokesman, David Curry and Ian Taylor, after they rejected the hard new line.

But, in what was to be seen as a turning point in Tory policy, Mr Hague went further in a hugely important speech in Paris in May this year.

Speaking to the INSEAD business school in Fontainebleau, where he was himself a student in 1985, he took the Tories dramatically to the Eurosceptic right.

In words which Mr Heseltine swiftly denounced as more extreme that Mrs Thatcher, he said a single currency could lead to Asian-style public disorder if it went wrong.

"The single currency is irreversible. One could find oneself trapped in the economic equivalent of a burning building with no exits," he said.

Other European leaders saw monetary union as a step towards full political integration - and that could undermine "peace, stability and prosperity" within the EU.

Euro dangers

"My fear is that the creation of a single currency will take European political union well beyond its acceptable limits. The effect of imposing a one size, fit all, single interest rate on a set of different economies with different cycles, structures and circumstances could be disastrous," he said.

And, widening his attack, he added: "I have to tell you, there is a limit to European integration. We are near that limit now.

"Push political union beyond its limits and you jeopardise the very peace, stability and prosperity which Europe's post-war statesmen were so anxious to secure.

"My fear is that the creation of a single currency will take European political union well beyond its acceptable limits," he said.

The inevitable backlash soon followed with Mr Heseltine and Mr Clarke warning that the new policy risked consigning the Tories to electoral oblivion. But Mr Hague not only stood his ground but upped the ante.

Eurosceptics boosted

John Pienaar: "Reshuffle consolidates idea of Eurosceptic party"

In his first shadow cabinet reshuffle earlier this month, he consolidated the Eurosceptic grip on the top team by advancing leading supporters, including Francis Maude and Gillian Shephard, and left the Europhiles firmly out in the cold.

His strategy has further isolated and angered the left and earlier this week Tory peer Lord Hacket defected to Labour in protest at the shift to the right.

Mr Hague's strategy has dismayed many on the left and confused even more.

They argue that he has unnecessarily tied the party's hands on the issue and they fear that, once the currency is up and running, it will become increasingly difficult for Britain to resist the pressures and likely benefits of membership.

What is certain is that it is Mr Hague's biggest gamble yet. He hopes his leadership and decisiveness will unite the party and marginalise the Europhiles.

His opponents fear he has signalled the start of another bout of in-fighting that could hang over the party through the next general election.

• A long way still to go

• Making his mark

• Commons success, image failure

• Chronology