Tim Montgomerie, former chief of staff to Iain Duncan Smith and now a columnist for The Times, said he joined the Tories 28 years ago under Thatcher, not just for "the colour of her politics, but the strength".
But the 45-year-old said the "charade" over the EU was the "final straw and it follows abject failure on immigration, deficit reduction and inequality".
Cameron is heading to Brussels for a crunch summit of European leaders with key elements of his demands for change in Britain's relations with the EU still in dispute.
It has been revealed that there is not yet agreement on highly complex financial rules designed to protect the interests of members which do not use the euro.
The prime minister has said there is a "good basis" for a deal on benefits for migrant workers and his demand for treaty change but European Council president Donald Tusk there is "no guarantee".
In a fiery Times column on Thursday, Montgomerie wrote: "The 69 per cent who think he got a bad deal are right. The newspapers that called the deal a 'joke', 'conjuring trick' and 'delusion' weren’t exaggerating. But it took the Fourth Estate rather than Tory MPs to point out the emperor’s naked state.
"With a few honourable exceptions Conservative parliamentarians were silent when Mr Cameron, pretending to have changed anything that matters, stood at the same dispatch box at which Mrs Thatcher vowed to fight European integration."
He added: "the overall direction of housing, tax, pensions, immigration and family policy has been to intensify inequality between the propertied and the unpropertied, between the old and young, and between those without children and those with".
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Montgomerie wrote he would not be joining another party. His comments about departing grassroots members will fuel speculation and feeling that the Tories could split or a new party of the right could emerge after the Europe referendum.
As Jeremy Corbyn's Labour languishes in the polls, Montgomerie predicted that "one day an opposition party will get its act together or a wholly new party will emerge".
"The PM will no doubt treat with disdain my resignation like the departure of tens of thousands of once-loyal grassroots members who have already walked away," he wrote.
Tory Backbencher Guto Bebb tweeted: "Should we care that an US based never elected Tory has resigned?"
Montgomerie replied: "I hope you don't treat all of your members with such contempt."
.@GutoBebb I hope you don't treat all of your members with such contempt— Tim Montgomerie ن (@montie) February 17, 2016
Writing on the website Montgomerie founded, ConservativeHome, Paul Goodman said Montgomerie was not quitting because he wanted a more right wing party, adding he was a "a consistent critic of UKIP and a campaigner for social justice".
He said: "Tim is far from alone in believing that there is a fundamental lack of seriousness about the Cameron project. Party membership has halved since the latter became leader, and not all of the losses are deaths and defections."