The Times quoted "senior sources" within the Tories as saying that membership had shrunk to around 325,000, compared with the one million-plus members under Margaret Thatcher's leadership.
The Tories' deputy chairman, David Prior, told the BBC that numbers were actually on the increase.
Mr Prior told Radio 4's World at One programme: "In fact our membership is rising. We think our membership today is about 350,000."
His comments came after The Times reported that Conservative Party membership was at its lowest level since World War I.
The Times quoted "senior sources" within the Tories as saying that membership had shrunk to around 325,000, compared with the one million-plus members under Margaret Thatcher's leadership.
When William Hague became leader in 1997 he promised to double membership within two years and return numbers to the million-plus bracket by the turn of the millennium.
But Mr Prior, MP for Norfolk North, said it was impossible to say exactly how many members the party had had at that time.
He said: "We never kept national membership records until just over a year ago. Each Conservative association around the country kept their own records. We now do have an accurate membership list and it is growing.
"All political parties are finding it difficult to attract new members, but we have, I think, turned the corner."
'Undemocratic'
Mr Prior said that Mr Hague had taken steps to democratise the party in order to attract fresh blood, and that members were now able to vote on the leader, the manifesto and the policy on Europe.
But his comments were challenged by John Strafford, chairman of the Campaign for Conservative Democracy, who told the programme: "The membership of the Conservative Party, and indeed the Labour Party as well, has been in long-term decline for 50 years.
"To say that there is more democracy is just not the case. We have gone backwards, in fact."
Michael Normanton, chairman of the Conservative Party Charter Movement, added: "The party probably still is in decline, because we have an unfriendly, undemocratic party which is totally unwelcoming to new members."
A spokesman for the Tory party refused to comment on reports that the party was considering scrapping a £15 membership fee introduced by Mr Hague in 1998 in an effort to put finances on a surer footing.
But he confirmed that the party was undertaking a fundraising and recruitment drive and said initial reaction had been "very encouraging".