Britain should contemplate leaving the European Union, Liam Fox has said in a controversial speech that is being seen as a first shot at bidding to succeed David Cameron as leader of the Tory party.
In his first major speech since he stepped down from the cabinet last year, Fox said there was "simmering resentment" among voters that they were duped into voting for a political union in 1975 when all they wanted was an economic community.
"Not only were they sold a pup but they were intentionally sold a pup," he said.
His words came as pressure mounts on David Cameron to take a stronger line on the issue, with Tory backbenchers losing patience with the prime minister's stance on Europe.
Fox's intervention on this issue has been interpreted by many Westminster watchers as an attempt to take control of the Tory right, which is pushing for a stronger line on EU politics.
However the former defence secretary cautioned fellow eurosceptics against calling for an immediate referendum as he said this would play into the hands of the europhiles in parliament.
"I too believe that a referendum will be vital but I believe that having one now would be a huge error with enormous tactical risks," he said.
"It is not a coincidence that some convinced euro-enthusiasts support such referendum calls, confident that a scare campaign based on false fears of political and economic isolation would win the day."
Fox said Britain should negotiate a "new relationship" with the EU based on "economic rather than political considerations" followed by a referendum to allow voters to agree to the new set up.
But he said if other EU nations were not willing to accept this then there should be a referendum on whether to leave the EU all together.
"For my own part, life outside the EU holds no terror as I believe globalisation will increasingly force countries to cooperate more closely on the basis of functional commonality rather than geographical proximity," he said.
Fox told an audience in Westminster that the notion that Berlin was prepared to impose "any level of austerity in any other country apart from Germany" in order to make the euro succeed risked instability and the rise of nationalistic sentiment.
"It potentially makes the stability pact a suicide pact," he warned. "The idea of austerity being forced upon smaller nations by Berlin has too much historical resonance to succeed without fostering potentially dangerous political backlashes on both left and right. "
On Sunday the prime minister said he acknowledged the need to ensure the UK's position within an evolving EU has "the full-hearted support of the British people".
Tom Newton Dunn
In an article for The Sunday Telegraph he stressed there would be further opportunities in the coming months and years to win back powers from Brussels and that he wanted to be able to offer voters a "real choice" in any potential referendum.
"As I have said, for me the two words 'Europe' and 'referendum' can go together, particularly if we really are proposing a change in how our country is governed, but let us get the people a real choice first."
He is expected to set out more detail about the possibility of a referendum in the autumn.
However his attempt to mollify his backbenchers appeared to backfire as several came out to criticise him for not going far enough.
Influential eurosceptic backbencher Mark Pritchard said Tory grassroots were "fed up of aluminium guarantees" and insisted there should be a referendum during the current parliament.
"Once again, when it comes to Europe, it's always jam tomorrow. But tomorrow may never come," he said.
Nearly 100 Conservative MPs wrote to Cameron recently urging him to make a legal commitment to hold a poll on the UK's relationship with the EU during the next parliament.
Tory MP John Baron, who organised the letter, told the BBC: "I welcome the fact he is now talking about a referendum, but you will notice he hasn't promised one and that he is justifying that position by suggesting now is not a good time for an in-out referendum.
While Fox stayed in step with the prime minister today by cautioning against holding a referendum immediately, the MP for North Somerset stood against Cameron in the 2005 Tory party leadership race and today's speech will be seen as the first step on the road to his rehabilitation as a front line politician.
He was forced to quit government in October 2011 following days of allegations that he gave his close friend Adam Werrity inappropriate access to the Ministry of Defence.