Ken Clarke was brought back to the Tory frontbench ths week
Ken Clarke is reported to have warned against the Tories taking a "right-wing nationalist" stance on Europe shortly before returning to the shadow cabinet.
The MP, who was made shadow business secretary this week, is quoted as telling a conference in December that this would alienate Barack Obama.
Labour said this was a correct analysis of Tory policy on Europe, which was to "isolate the UK".
But the Conservatives said this was an "absurd interpretation" of the remarks.
Mr Clarke, seen as one of the most Europhile Tory MPs, has sometimes been at odds with the party's leadership on the issue.
But on his return to the shadow cabinet, the former chancellor said he would vote in favour of leader David Cameron's policies.
However, a debate at Nottingham University in December is quoted on the publicservice.co.uk website, in which he addresses party policy ahead of Mr Obama assuming the US presidency.
The article reports Mr Clarke saying: "A lot will depend on relations with Europe, because Obama doesn't want his strongest European ally led by a rightwing nationalist.
"He wants them to be a key player inside Europe, and he'll start looking at whoever is in Germany or France if we start being isolationist.
"I think the need to be working with Obama will influence my party on Europe.
"It is still firmly Eurosceptic but it's now moderate, harmless Eurosceptism. It's a bit silly sometimes, like which group do you join in the European parliament, but full-blooded stuff like renegotiating the treaty of accession is as dead as a dodo.
"We've got lots of ideas on European policy on energy, security, relations with Russia, climate change, all that kind of thing [but] somebody like me is far more relaxed about all that [and if the Tories] get into office the pressure of the American alliance will make them more European."
For Labour, Europe minister Caroline Flint said: "Ken Clarke is absolutely right to warn David Cameron that his European policy would only serve to isolate Britain from the US.
"It's a straightforward test for David Cameron: give up your policy on Europe, as Ken Clarke says, or give up the special relationship.
"Tory policy on Europe is 'crackpot', 'dotty' and 'frankly absurd', as Ken has repeatedly said.
"Cameron might have called Ken an 'Americo-sceptic' in the past but it's key to our special relationship that Britain remains strong in Europe, not isolated, marginalised and on the fringes."
But a Conservative spokesman said: "This is an absurd interpretation of what Ken Clarke said.
"He was not referring to David Cameron but talking in entirely hypothetical terms - he has never and would never describe David Cameron in that way.
"This is no more than a desperate attempt by Labour to try to distract attention from their catastrophic handling of the economy.
"As far as the position on Europe is concerned, Ken's views are well known, but, as he said when he was appointed, he accepts that the Conservative Party has a settled view on European matters and he will not oppose the direction David Cameron will set on European policies in the future."