PRIME Minister Tony Blair has accused the Tory Party of being "bought" by North Yorkshire-based millionaire Paul Sykes during heated exchanges in the Commons.

Mr Blair launched the attack during Prime Minister's Question Time after Mr Sykes decided to "renew his relationship" with the Conservative Party.

Mr Blair said: "Mr Sykes said he was in the 'never' camp on a single currency and that was where the majority of Conservative MPs were.

"I believe that it is sensible to keep the option open for this country and give people a choice in a referendum.

"That is different from a political party that has now been bought by someone who wants to take this country to the margins of Europe."

But Tory leader William Hague highlighted Cabinet divisions over the euro and goaded Mr Blair to fully enter the debate on the single currency.

He said: "He is spending tens of millions of pounds of taxpayers' money preparing to join the euro.

"He is telling business to spend hundreds of millions preparing to join the euro.

"He obviously wants to join the euro, so when will he put his mouth where he puts other people's money and risk his own capital campaigning to join the euro?"

Mr Sykes has stepped down as chairman of the anti-Europe Democracy Movement as a result of his change of heart towards the Tories, following a pledge by Mr Hague for referendums on further European integration.

Mr Sykes said: "I feel it would be inappropriate for both the Democracy Movement and the Conservative Party for me to remain as chairman of a non-party organisation whilst giving high profile support to one political party."

But Mr Sykes will continue to give financial support to the Democracy Movement in its campaign to keep the pound and oppose federalism.

He has hinted he may be ready to "help out" the Conservatives with funding, but pro-Europeans have greeted his change of stance with dismay.

Simon Buckby, campaign director of Britain in Europe, said: "Paul Sykes's real agenda is to take Britain out of Europe. It would be a great shame if the Conservative Party were to go down that road."