Pro European Tories are mounting a counter attack after what they see as "a right wing coup" that handed control of a planned transnational party and think tank to a group of Euro-skeptics, led by Daniel Hannan MEP and dashed Conservative Central Office hopes of having "a safe pair of hands" in charge. It is rumoured that party grandees like Malcolm Rifkind or Michael Howard, who led the party out of the electoral wilderness and paved the way for David Cameron, were to be given leadership of the two new bodies. Tories claim that a meeting to discuss the new party, called the Alliance of Conservatives and Reformists in Europe, and a think tank called New Direction: Foundation for European Reform, was "hijacked" by Hannan, backed by Conservative Shadow Minister of State for Europe, Mark Francois, when a snap vote was called and Hannan was made Chairman of the new party and Czech Euro-skeptic, Jan Zahradil MEP became the President despite having been beaten by the pro-European Miroslav Ouzky MEP for the leadership of the Czech delegation.

The board of the new party is to be composed of one representative of each of the parties in the European Conservative and Reformists Group, leaving the Tories, who hold 25 of the 54 parliamentary seats as well represented in decision making as the solitary member of the Latvian For Fatherland and Freedom Party. The Secretary General of the party is considered likely to be a current staff member from theECR Group, which, some are suggesting, may not be legal as European law seeks to separate spending by groups from that of political parties or foundations.

Daniel Hannan "Should Have His Whip Withdrawn"

The new foundation is under the control of fellow Euro-skeptic Geoffrey Van Orden, who is expected to use the position as a base to challenge Timothy Kirkhope MEP for leadership of the European Conservative MEPs. These bodies are hoping to get EU funding, potentially worth over €1 million, as the group would get awarded over €15,000 for each MEP who joined. It is claimed that ten Tory MEPs are refusing to sign up and are coming under strong pressure to change their minds to unlock more cash. However, first of all they will need to get the approval of the EP Bureau, which may be problematic as one Edward MacMillan-Scott MEP sits in the Bureau.

Pro-Europe MEP's in the ECR Group, understood to be led by James Elles MEP, objected to leaving the EPP and are described as being strongly opposed to Daniel Hannan's latest venture, especially because of his open support for the Better Off Out campaign, seen as being in opposition to David Cameron's policy on Europe. One Tory source commented "Rather than rewarding Daniel Hannan with positions, he should instead have his whip withdrawn for campaigning against official Conservative policy on Europe". With the Euro-skeptics taking control of the European party, it is hard to see their withdrawal ambitions fitting with William Hague's recent commitment to US Secretary of State, Hillary Clinton that the Conservatives would be "very active and activist from the very beginning in European affairs".

William Hague "Unfit To Be Foreign Secretary"

Edward MacMillan-Scott remains defiant, telling New Europe that "putting aside trivial ambitions among MEPs, the fact that Daniel Hannan has been promoted to the powerful financial post shows that the obsessive Euro-skepticism of William Hague has triumphed again over the interests of the Conservative Party and country. Daniel Hannan is a member of Better Off Out and even David Cameron will not allow members into the Shadow Cabinet. Dan was the architect of the ECR - which is causing massive political damage to the Tories. He is now punting a referendum on the EU, which will split the Conservative Party in government. He is more interested in UK independence from Europe than the interests of the Conservative Party and William Hague's backing for all these projects shows him to be unfit for Foreign Secretary".

A pro-Europe Conservative said that "I admire Dan, even though I disagree with everything he says, but he has a real intellect and he does stand up for what he believes very clearly and he's prepared to take the flak for his views". This time he has just gone too far and it's damaging the party." When asked about how to resolve this mess the source said "We have to admit we made a mistake in forming the new group and go back to the EPP ." This may be possible as David Cameron is said to be "in despair" at these developments and he may be looking at the olive branch proffered by EPP President Wilfred Martens. Speaking in London recently, Martens sought to reassure Tories by saying that "our history and traditions mean that we will never become a single state" and that the Tories were "with a weak and very marginal group that has no influence". Also unhappy are the Americans and it is believed that President Obama also queried Cameron over plans to leave the EPP when he visited Britain, a warning repeated by Clinton to Hague. In his speech, Martens also said about President Obama, ""I fully share his view that British membership of the EU has benefited us on both sides of the Atlantic, a view he has made abundantly clear in recent months."

US concern is being expressed in plans to set up a G4, comprising of the US, Japan, China and, no, not the EU, but the Eurozone, leaving a future Conservative government out in the cold.

Questions Over Cameron's Judgement

In the run up to a British election, the Conservative policy on Europe seems to be in complete disarray as the European party becomes ever more closer to the UKIP position, whilst in London William Hague is telling people they will be active in Europe. In a similar confusion is their line on a Blair presidency. Hague calls it "an act of hostility" while Cameron says they will "deal reasonably" with any president, even Blair. Their line is no clearer on Lisbon. ECR Group Leader Kaminsi is in favour and supported the Irish Yes vote, whilst Cameron and Hague oppose the treaty. It is important to recall that Dan Hannan justified the setting up of the ECR Group by saying, "it is wrong for Conservatives to say one thing in Britain and do another in Brussels". Quite.

With such disarray, some are questioning Cameron's judgement in following Hannan's lead out of the EPP, and more importantly, the wisdom of allowing William Hague such a free hand in Europe, especially when Mark Francois reportedly stayed silent throughout the meeting where the skeptics took control, even though he knew their positions were against official policy. If Cameron and Hague can't control a mere 29 MEPs and their actions are leaving them isolated from both Europe and the US, one can only imagine the chaos should they win the next UK General Election.

The Labour party are exploiting this. At the European Summit, UK Foreign Secretary David Milliband said that "The Conservative Party has withdrawn from the mainstream grouping of the right of centre european families, has withdrawn from the European Parliamentary grouping of President Sarkozy, Prime Minister Reinfeldt and Chancellor Merkel and in that context, the divorce they have sought from the mainstream European centre right family is very significant because it is an indication of the sort of isolation that Britain could face if the Conservatives were to come to power." Prime minister Gordon Brown follwed that by saying "The Conservative Party is standing apart from the mainstream in Europe. They could have been part of the group that is nearly 200, the European Peoples Party, instead they have gone for a very small group of minorities of 23 people, I think, of the Conservative Party and they're standing on the fringes of europe. just remember 3 million jobs depend on our membership to Europe, 750,000 companies from Britain are trading in the European Union, 60% of our trade is with Europe and as we have co-ordinated economic policies to get us out of recession, the benefits of being part of the European Union should be obvious to everyone".