THE bitter civil war within Tory ranks over Europe escalated last night when former Conservative Minister Sir Leon Brittan openly set out to demolish William Hague's criticism of the 15-member union.

Now Britain's senior European Commissioner, Sir Leon accused the Tory leader in remarkably blunt fashion of being out of touch with reality and of projecting a picture of the European Union which was ''a fundamentally flawed anachronism'' and which simply did not stand up to examination.

He warned that if his own party failed to come to terms with the reality of today's EU, it ''would truly become a party of dinosaurs''.

Sir Leon used the annual Rab Butler lecture in London last night to deliver a line-by-line rebuttal of the unexpectedly ferocious attack Mr Hague had unleashed in Paris last week.

Then, the Tory leader had accused the union of dragging its feet on enlargement and warned that a single currency would create the economic equivalent of being trapped in ''a burning building with no exits''.

Britain's senior European Commissioner also gave his support last night to the decentralisation of power in the UK, when he told his audience: ''The Conservative Party is rightly coming to terms with the moves towards increased decentralisation of political authority through devolution to Scotland and elsewhere.''

Following on the heels of the defence of the EU made by the former Deputy Prime Minister Michael Heseltine 10 days ago, Sir Leon's decision to challenge head-on the anti-European rhetoric from the party's current leadership will ensure that Europe remains a fundamental faultline between Conservatives.

''William Hague is applying a 1980s vision to a simplified caricature of the European Union of the 1970s. It is not Europe that is out of date, but the perception of what is actually happening in Europe today. In truth, the European Union of the 1990s is wholly different,'' he told his audience at London's Carlton Club.

Sir Leon listed the EU's achievements in opening up markets both at home and abroad and dismissed the Tory leader's criticism of the single currency. ''What is certainly absent in the analysis expounded by William Hague is that the drive towards an open, liberal, and flexible Europe has in reality been accelerated by the advent of economic and monetary union,'' he countered.

Leading businessmen opposed to European economic and monetary union are to meet to step up their bid to halt the Government's drive towards signing up to the euro.

More than 100 senior figures from the world of business and commerce will be at the London launch of an 80-page critique rejecting the single currency on economic terms.

They will be joined at the Cafe Royal on July 3 by Mr Hague, who will be among speakers putting the case against EMU. Organised by the European Research Group, chaired by Tory Euro-sceptic Sir Michael Spicer, the conference represents the stepping up of a campaign to block EMU.