Tory leader Michael Howard has sought to portray his party as offering a middle way between withdrawal from the EU and moves to create a super state.
Michael Howard wants more power returned to national parliaments
In a speech he contrasted his party's position with that of the UK Independence Party "at one extreme" and Labour and Lib Dems at the other.
On Saturday the Tory whip was withdrawn from four peers for supporting UKIP ahead of the Euro elections on 10 June.
A recent poll has suggested that support for UKIP has hit the Tories.
Mr Howard said: "At one extreme there are the candidates from the UK Independence Party - they represent a party that wants to pull out of the European Union altogether.
"They have frequently failed to vote in the European Parliament on issues that are vital to Britain.
"At the other extreme are Labour and the Liberal Democrats - who want to transfer even more from Britain to Brussels, setting Europe on the path to a single European State.
"The Conservative Party rejects both these extremes."
But for Labour, Europe Minister Denis MacShane accused Mr Howard of being the "god-father of anti-European politics in Britain".
"Many of UKIP's arguments and positions have been taken directly from Michael Howard's anti-EU speeches over the past decade," he said.
Liberal Democrat leader Charles Kennedy meanwhile said Mr Howard was clearly "rattled" over the European polls, with the Conservatives locked in "a council of despair, confusion and division".
In an open letter, the group of four peers who lost the Tory whip, called on the electorate to vote for the Eurosceptic UKIP.
They said this was the only way of persuading Mr Howard to pull the UK out of the European Union (EU).
"It is to that national interest that we all owe our allegiance," the peers said.
One said that "a large number" of Tories were set to back UKIP.
A press report has said that in a leaked Conservative briefing paper, UKIP have been described as "cranks and political gadflies".
UKIP's Nigel Farage said such personal abuse showed the Tories were in "full panic mode".
"I think he's insulted many people in his own party and over half the country," he said.
"It is not a cranky opinion to say that the best people to govern Britain are the British people themselves."
On Tuesday Mr Howard outlined where he believes the EU has been failing and what needs changing.
And he reasserted his opposition to the proposed EU constitution.
He cited the US as an example that Europe could follow arguing that lower unemployment and higher productivity would be benefits of a less regulated EU.
Off the peg?
"We need a Europe that is built on mutual respect, not mutual suspicion," said Mr Howard.
"For Europe to be a success in the 21st century it needs to do less but do things better.
"Such an approach would create an imaginative structure for the European Union.
"Indeed it could well be seen as a model by countries in other parts of the world wanting to co-operate more closely with each other without sacrificing their essential national sovereignty.
"That flexible approach would ensure that we create a 'made to measure' Europe in which the institutional arrangements comfortably fit national interests, not an "off the peg" Europe, ill-fitting and splitting at the seams.
"That is my vision for Europe."