Donald Macintyre: Could the Tory party be coming to its senses at last?

Hindsight is a wonderful indulgence. But just suppose that Michael Portillo had emerged into the sunshine that June morning when he announced his candidacy for the Tory leadership and instead said that he was backing his old Cabinet colleague Kenneth Clarke.

In your dreams, say most worldlier Tory MPs, Portillistas among them. It would have finally shredded his reputation for consistency. He would have bottled the leadership once again, albeit less messily than in 1995. He would have been seen to have crossed from one side of the ideological divide in the Tory party to the other. His substantial body of bright young right-wingers would probably have deserted him. And so on.

Well, OK. Never mind that when the Tories were actually in power, under Margaret Thatcher, let alone John Major, Cabinets were run as a broad coalition between left and right. Or that he would have been following that sensible law in politics that young cardinals vote for old popes. Or that it could have been presented as an act of historic statesmanship as well as a sensible each-way bet. Whether Mr Clarke succeeded or failed as leader, he would be perfectly placed to inherit in a few years. Maybe, despite all this, it just wouldn't have worked.

Mr Portillo certainly seems to have thought so. How else fully to explain why he decided to bow out of front-line politics "for ever"? For this was, in a sense, his second chance to do what he didn't do in the first place. The Sun headline which screamed "Portillo Destroyed" yesterday morning was wrong. He wasn't. Intense and inexcusably ignoble efforts were made by agencies as disparate as Lord Tebbit and the Daily Mail to do just that. He ran a poor campaign stuck on the issues of sex and drugs, in which he was fatally trapped at the hustings before MPs by a lethally planted question from the Duncan Smith supporter Julian Brazier on whether he would support the repeal of Section 28. He was badly damaged by the wishful weekend reports of an endorsement by Baroness Thatcher. Nor do I believe the canard that Duncan Smith supporters voted tactically to do down Portillo. There is every sign that they feared Clarke as an opponent more. But none of this means that Portillo was finished in politics. He would have been assured a prominent place in a Clarke regime.

In that sense, it's not only a real loss, as Mr Clarke handsomely acknowledged yesterday. It was also a literally unnecessary one. It will no doubt be more painful to some of the overbearing young zealots around him than it will be to the man himself. Maybe, with other interests, he had simply lost his hunger for the struggle. Either way, Mr Clarke will now have to do without him.

But his departure buries, at least for time being, identity politics in the Tory party. Iain Duncan Smith and Kenneth Clarke have one factor in common, which is a reasonably steadfast record of focus-group averse adherence to the view that beliefs, rather than mere personality, are what drive the politician forward. Mr Duncan Smith was tormenting John Major over Maastricht when his views were less fashionable in the party than they were to become. Mr Clarke's Europeanism, not to mention his resistance to the notion of the radically shrinking public realm, have been a constant for more than 20 years.

Nobody is quite sure how this unpredictable and hitherto unconsulted beast, the Conservative party membership, will now choose between the two. Or how far the most vocal element of the new "selectorate", the party's activists, represent the views of the silent majority who merely pay their subs, don't turn up to meetings, identify most closely with the floating electors whom Mr Clarke appears best placed to win back, and should, if the turnout is half decent, decide the outcome. The election, do not forget, will now be decided in the majority of constituencies, where there isn't a Tory MP to advise them.

Each candidate will face the charge that his election will precipitate defections. Some activists have already been rolled out to say they would leave if Mr Clarke won; but Steve Norris's hint that he might join Labour if Mr Duncan Smith won is a reminder of the extent to which libertarians (of which Mr Norris is one) and pro-Europeans (which he isn't) will be repelled by a Duncan Smith victory.

So far, so equal. But for Mr Clarke, as the bookies' favourite, the candidate who starts the race without having to prove he looks like a Prime Minister-in-waiting, and for whom it is the last chance, the stakes could not be higher. And against him one of the central arguments of his opponents is already that Labour will play every parliamentary game it can to expose the differences on Europe between himself and a majority of his MPs – as Mr Blair yesterday began, with a light touch, to do.

Perhaps. But that depends partly on what Mr Blair, in his second term, really wants. Apart from the fact that for mere reasons of party politics Labour now fears Mr Duncan Smith less than Mr Clarke, this question has always been more complex than it was in 1997, when Labour spun that it wanted William Hague. Ministers struck me, when asked about Portillo-or-Clarke, as confused. On the one hand, the divisions on Europe in a Clarke regime are inviting; on the other, he is a much more formidable opponent to Chancellor and Prime Minister. Nor is there is any dancing round the fact that his leadership will make a euro referendum easier. For the statesman in Blair, Clarke may be the preferable choice; for the party politician, he isn't. For the country, Mr Clarke surely holds out the prospect of a better opposition and with it, perhaps, a better government.

But in any case, the Clarke campaign won't be a pushover, or anything like it. He cannot wholly rely on an impressive – but also controversial – record as a health and education reformist. He will need, as he seemed to acknowledge yesterday, to start talking in this campaign about the public services, instead of talking about talking about them. One of the lessons of the Portillo campaign was that an alternative modern Tory policy for delivering better public services was the hole in the programme.

In some ways this is easier for Mr Duncan Smith, a convinced state-shrinker, than it is for Mr Clarke who does not differ as fundamentally from the Blairite vision: Christian Democrat instead of Social Democrat. He will also need discipline. His spontaneity is one of his greatest assets, but loose obiter dicta are one of his greatest dangers. If he wins he will need to change the leadership election rules (which are in need of radical reform) to prevent a sudden attempt by his parliamentary enemies to stage a vote of no confidence in a year or two.

But the momentum is now with him. Tuesday's vote was a bat's squeak of sanity, evidence at least that more MPs than ever expected think that winning is more important than Europe. If a simple majority of members also accept this premise, he's home. And the landscape will be transformed, in ways, I suspect, that even the Prime Minister has not yet begun fully to anticipate.

d.macintyre@independent.co.uk