Steve Richards: The Tories may be in agony now. But Portillo is their only option

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Plots, deals and more plots: the bid for the top job begins

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Tory leadership: the rivals

Beggars can't be choosers, or so the saying goes. It seems that they can if they are leading lights in the Conservative Party. According to Lord Tebbit and The Daily Telegraph, the party needs a "normal" family man with children as its new leader. Ann Widdecombe seems to agree, although she is not a man and has no family of her own. All of them state that their party should be for the family, for a specific way of life, and by implication against other lifestyles. At their lowest point, some Conservatives are still focusing on who they want to exclude from their ranks. The beggars are still choosing.

Over the next few weeks there will be big debates about whether the party should be more libertarian or more authoritarian. Indeed, the debate has already started. In an interview given to Edwina Currie on the BBC, the Rutland and Melton MP, Alan Duncan ­ a Portillo supporter ­ said the party should be all about "sex, drugs and rock'n'roll". It was hard to tell who was more excited by the prospect, Mr Duncan or Ms Currie. It is difficult to imagine Ms Widdecombe marching through the streets of Maidstone under such a banner.

But Ms Widdecombe's moral authoritarianism serves to unite most Conservative MPs. They are, quite simply, united against her. No doubt, the party will have intense arguments about precise issues such as the legalisation of cannabis. But it is noticeable that Michael Heseltine and Kenneth Clarke have also stressed the need for Conservatives to celebrate a diversity of lifestyles. On the inclusive agenda, the leading Europhiles are at one with Mr Portillo. They are ready to rock'n'roll.

In this respect the Portillo camp is striding ahead with some confidence. So confident is it that some Portillistas have called for a very theatrical fight with Lord Tebbit. Indeed, one suggested at an early campaign meeting that the expulsion of Lord Tebbit from the party would have great symbolic potency ­ such an abolition being almost as powerful as Mr Blair's abolition of Clause Four.

The degree to which the Portillo camp wants to shake up the party should not be underestimated. I have spoken to several of his supporters in recent days. They have advocated measures such as positive discrimination for women in the selection of parliamentary candidates, which, for them, is a revolutionary leap. Here is a flavour from John Bercow, a right-winger and MP for Buckingham, who claims to have been on his own political journey: "When people talk to themselves it is the first sign of madness. The same goes for political parties. We have been talking to ourselves for too long ... it's absurd we have so few women either as candidates or in other prominent positions. If positive action is needed to tackle this problem, there's no point shying away from it. It's no good the Conservative Party being misty-eyed about traditional units and structures. Such an approach is wrong in itself and electorally disastrous."

No doubt Lord Tebbit and others will twitch nervously at such sentiments, but Mr Bercow's observations should be the starting point of the Tories' recovery rather than the opening of a raucous internal debate. Indeed, in any party not on the verge of madness they would be. Without more women, gays or single parents in prominent positions, any major party risks talking to itself. It risks madness.

Because most parties step back from an insane wilderness, the views of Mr Portillo, Mr Bercow, Mr Heseltine et al will almost certainly prevail. The party in the country is uneasy and suspicious, but it is far more uneasy about losing elections all the time. No doubt the tensions between liberals and authoritarians will rumble on, but they rumble on in all parties. The new Home Secretary, David Blunkett, has an authoritarian streak that alarms some in the Labour Party. But they will live with it. If they protest too much, Mr Blunkett will probably lock them up.

Lord Tebbit and Ms Widdecombe will live with a more inclusive Tory party, too. They will not have much choice in the matter. Defecting to the Liberal Democrats would not make much sense in their search for a more "normal" party. Inadvertently, the choosy beggars are doing the inclusive wing of the Conservative Party a favour by focusing on a chasm that is not as great as it seems. It is Europe that remains the party's fatal divide.

The self-confidence with which the Portillistas proclaim their desire to take on Lord Tebbit and Ms Widdecombe subsides when they are asked to address the problem of Mr Clarke and the euro. Quite simply, they do not know what to do about Mr Clarke, a popular figure in an unpopular party. At the same time Mr Clarke does not know how to make the most of his popularity in the country when his views on the euro are loathed by most of his parliamentary party.

In my view it is a fantasy, albeit an attractive one, to assume that Ken Clarke could be leader of the Conservatives in their current state. But imagine Prime Minister's Question Time this autumn when Mr Clarke, as the Conservatives' new leader, chides Mr Blair for failing to hold an early referendum on the euro. Mr Clarke's own parliamentary party would be wild with silent ­ or not so silent ­ rage over the biggest issue of Labour's second term.

It is equally difficult to envisage Mr Clarke sitting in a shadow cabinet led by Mr Portillo. Imagine another scenario at Prime Minister's Question Time: Mr Portillo attacking Mr Blair over the euro. Mr Blair would have an easy answer every time: "The Right Honourable gentleman is getting very angry ... but his shadow chancellor/home secretary agrees with me, not him."

If Mr Clarke is leader of the Conservatives or in the shadow cabinet, the politics of the euro become much easier for Mr Blair. The divisions in the Conservative Party will be formalised rather than healed. Until the issue of the euro is resolved, the party's most popular politician has no choice but to remain in exile. The rest of his party has no choice but to keep him in exile.

This month's general election was only half an election. If Mr Blair dares to call one, the referendum on the euro will be the second half. Until such a moment the Conservatives cannot recover. In spite of the vilification being heaped on him by some newspapers, Mr Portillo seems the nearest the party has got to a unity candidate. The beggars will probably realise that they have no choice but to elect him as their leader.