The Conservatives’ policy on Europe was plunged into confusion yesterday when William Hague appeared to promise a referendum on the EU reform treaty even after it is approved by Parliament.

The Shadow Foreign Secretary, who has been under pressure from Tory Eurosceptics to harden the party’s position, told MPs that it would be unacceptable to ratify the treaty without a referendum. “This would not be acceptable to a Conservative government and we would not let matters rest there,” Mr Hague said.

He was immediately challenged by Kenneth Clarke, the former Conservative Chancellor and the party’s leading opponent of such a referendum, who asked him to clarify that an incoming Tory government would honour existing treaty obligations.

Mr Hague, however, promised only wide consultation within his party. He and David Cameron have been under pressure to go farther than their campaign to oppose the forthcoming parliamentary debate to ratify the reform treaty and have been urged to unpick the treaty if they win office.

Labour seized on Mr Hague’s remarks immediately, claiming that he had signalled a big shift in position that would damage Britain’s economy. Jim Murphy, the Europe Minister, said: “William Hague today signalled an extraordinary shift in Tory policy that would be a recipe for instability and be damaging to British business, British jobs and British prosperity. This latest commitment shows [that] David Cameron has yet again caved in. This rash pledge demonstrates \ the Conservatives are not a serious party ready for government.”

The row began as Mr Hague spoke in the foreign affairs debate on measures in the Queen’s Speech, in which he mocked a pledge by Gordon Brown to oppose further institutional change within Europe for a decade once the treaty is approved. He said that the treaty itself would trigger new momentum for European integration. Mr Hague told MPs: “If we don’t succeed in forcing a referendum in this House and if we fail to win in another place [the House of Lords], and if all EU member states implement the treaty and if an election is held later in this Parliament, which is a lot of ifs, then we would be in a situation where we had a new treaty in force that lacked democratic legitimacy in this country and in our view gave the EU too much power over our national policies.

“This would not be acceptable to a Conservative government and we would not let matters rest there.” When asked if that meant a postratification referendum, he replied: “It means what it says it means, exactly what I said earlier.”

Mr Clarke then intervened, telling Mr Hague: “It seems to me that the alternatives are repudiation of a treaty which this country has ratified, an attempt to renegotiate it or reopen it or a parliamentary process of some kind, or a referendum.”

Last month 47 Tory MPs, including prominent backbenchers and leading figures from right-wing groups such as the 92 Group and Cornerstone, signed a Commons motion by the Eurosceptic MP Bill Cash calling for a referendum on the treaty “before or after ratification”.

Mr Cameron denied any change in policy last night and said that Mr Hague was not giving a “nod and wink” in any one direction. His spokesman said that he was concentrating on pressing for a referendum now and that if the treaty was ratified there would be a range of options that he would not discuss at this stage.

Town halls wanting to impose council tax hikes above the rate of inflation should be required to hold local referendums, David Cameron will say today in London (Francis Elliott writes). Mr Cameron will unveil plans by the Conservative Party to cap council spending, arguing that handing more power to local people should include giving them the power to stop excessive rises. Local authorities wanting to impose large hikes would be made to send council tax referendum ballot papers alongside the annual bills. He will say that councils will also be required to state how they proposed to spend the extra cash.

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