THE Conservatives will lose the next General Election if they adopt ''extreme Euro-scepticism'', Kenneth Clarke said yesterday.

The former Tory Chancellor warned European policy was an area where the party ''must tread sensibly'' by avoiding extremism and divisions.

Speaking at a European rally in Bournemouth, Mr Clarke told delegates: ''We now must decide how Europhile candidates are going to be able to fight alongside Eurosceptic candidates in such a way that both can contribute to a Tory victory at the next election.

''It is one of the big tactical issues for the Party because we cannot win unless we attract some moderate pro-European votes.''

Despite a Conservative pledge that the party will not join the single currency during the lifetime of the next Parliament, Mr Clarke claimed there was only a narrow difference in timing between the official Tory view and his own personal opinion - that Britain should join at a fair exchange rate and as soon as the economic conditions were right.

He welcomed moves towards early enlargement of the European Union with the addition of countries from central and eastern Europe.

''I regard that as the most important European issue of the next Parliament,'' Mr Clarke said. ''The Conservative Party must avoid trying to invent ideological reasons for rejecting new Treaties that are essential to create the necessary constitution for enlargement.''

Mr Clarke said all British Conservatives were agreed that they wanted the European Union to be a Union of Nation States and not a United States of Europe. ''We all reject the idea of being governed from Brussels instead of Westminster,'' he said.

''President Chirac in his last big speech on the subject made it clear that he rejects the idea of a federal United States of Europe as strongly as we all do.''