The Tory former deputy prime minister told a fringe meeting at the Conservative conference in Blackpool that the party could only regain power by seizing the middle ground of politics which Labour was claiming to occupy.

The BBC's Emma Udwin reports: "Heseltine has warned Hague not to listen to those in the party who want the UK to leave the EU"

His comments came as Mr Hague again insisted that if he won the next election he would not take Britain into the single European currency in the lifetime of the next parliament.

And Mr Hague was quick to slap down the former minister, declaring: "This is Blackpool, the tide comes in, the sun comes up and Michael Heseltine makes a speech on Europe. He's been doing it for years."

Mr Heseltine told a meeting of the Conservative Mainstream group: "I hear talk of a search for new policies with clear blue water between us - take care I say."

He argued that over the past 50 years it had been Tory prime ministers who took the UK further into Europe, despite always facing the same criticisms.

"The end of sovereignty, the German takeover, 1,000 years of freedom, the monarch's head, the headlong rush - I've listened to every leader of our party reject these instinctive reactions too many times to be seduced by them now," he said.

"Of course the decision to join the single currency is not a decision to be taken lightly or in defiance of the evidence at the time."

Controversial alliance

Mr Heseltine's remarks are likely to further infuriate Eurosceptics in the party who feel their position was boosted by the Conservative victory in June's European Parliament elections.

He and former chancellor Kenneth Clarke have already angered many Tories for agreeing to join the pro-euro campaign group Britain in Europe, which will count Prime Minister Tony Blair among its chief supporters.

The group, which is also supported by Liberal Democrat leader Charles Kennedy, plans to promote the benefits of the UK's EU membership.

It also wants Britain to retain a credible option to join the euro if the new currency proves itself to be a success.

Mr Heseltine was due to attend the group's conference reception after delivering his speech on the fringe.

'Historic shift'

In his speech, he said: "Our self-interest as a nation is inseparable from that of our continental neighbours. It is becoming more so as the years pass."

Mr Heseltine warned the party "the age of empire is over.

"A new power - Europe - is a growing force of influence and respect." Mr Heseltine said the EU had a central role as the cornerstone of Britain's defence and economy.

But, he warned, "faintly at first, but with growing confidence the 'Britain out' brigade are inching our party towards a policy of incalculable folly - a policy that would leave France and Germany, our principal rivals for power and influence in the Europe of tomorrow, with the drawing boards of tomorrow on which to sketch their self-interest in our absence".

He said it was vital for the UK to retain a voice in cross-European debates such as on how to tackle asylum seekers.

The "historic shift" of Britain's ever-closer integration with Europe "is irreversible".

The former defence secretary warned the party's "tone of voice" over Europe was shifting and "easy headlines" were being bought at "too high a price".

Mr Heseltine said the party must remain where it belonged, in "the centre ground of British politics".

"We need not only the enthusiasm of our committed supporters, we need the votes of the disengaged centre.