At the end of last summer, British Conservatives looked to be in their strongest position in decades.  In May, David Cameron’s Tories defied the polls and the experts to win a majority in the general election.  The Labour Party then went bananas and elected as its leader an unreconstructed far leftist with a beard called Jeremy Corbyn.  Smug Tories started talking about being in government for ten years at least.  Cameron and his chancellor, George Osborne, began looking more pleased with themselves than usual, which is saying something.

More perspicacious Westminster observers, however, spotted the hubris.  In August, Matthew Parris, a former aide to Margaret Thatcher and a well-respected center-right journalist, argued that Corbyn’s leadership could destroy the Conservatives, because the fear of Labour was the glue that bound the otherwise fissiparous Conservatives together.  Or, as he put it, “No internal gravitational pull by any one uniting ideal keeps our always-troubled Tory marriage alive: it’s fear of what lies outside our walls that achieves this.”

Conservatives, Matthew argued, are not one party but three.  There is the “Ukippy strand . . . deeply patriotic, fierce about defence and hostile to the EU.”  (It’s a reference to UKIP, the United Kingdom Independence Party.)  Then you have the “Small State party . . . small in number but strong in the power of their energising philosophy.  They’re dominated by dislike of government and bureaucracy.”  Last but not least, the “economically fairly liberal but quick enough to intervene if things go wrong” “One Nation Party” to which Matthew belongs: “[W]e worry about the poor.  Morally we’re on the permissive side.  We may not be mad keen on the EU, but on balance we’d let well enough alone.”

Take away a credible Labour opposition, Matthew concluded, and soon enough events would turn these tribes against one another.  Eight months on, Matthew’s warning looks prophetic.  According to Tory MPs and even some ministers, after the election Cameron and Osborne started to govern as a “duopoly,” and resentment toward them has begun to boil over.  Osborne, in particular, has seemed to be so determined to position himself perfectly as Cameron’s obvious successor that he is neglecting his duties at the Treasury.  In June of last year, he announced cuts to tax credits for low-income families, which horrified many lower-middle-class voters who had backed the Tories in May.  He also announced cuts to the police force, then reversed course as it became clear that the public were scared witless by terrorism.  And in his March budget, he provoked a political firestorm by announcing cuts to benefits for disabled people, which led to the resignation of Iain Duncan Smith as secretary of state for work and pensions.  Duncan Smith, a former party leader, said the party was now putting the interests of the rich ahead of everyone else.

Looming like a political iceberg on the near horizon is the referendum over Britain’s membership in the European Union.  If Britain votes on June 23 to leave the E.U., the Conservative Party could be sunk forever.  If Britain votes to stay, the Conservative Party could be sunk forever.  Cameron promised the referendum as a sop to Euroskeptics—that Ukippy strand, and most Small Staters—and as a way of staving off the growing UKIP threat in the election.  The offer was always going to come to back to bite him.  Europe is the Tories’ greatest problem; it sets those Conservative factions against each other like nothing else.  The Cameron modernization project—like Tony Blair’s modernization project for Labour—was supposed to have brought the Tories into the 21st century.  But the referendum is dragging it back to the 1970’s and 80’s—opening up old wounds from the days of Margaret Thatcher and Ted Heath.

Cameron’s idea was to lance the Europe boil by renegotiating favorable terms for Britain’s membership in the E.U.  By taking back certain powers from Brussels, he believed, he could placate enough of the Euroskeptical center-right to secure a “Remain” vote when the referendum came around.  It was a vain hope.  Euroskeptics were never going to be content with any renegotiation that failed to overhaul the current E.U. power structure—and the E.U. was never going to agree to that.  But lots of Tories pretended that Cameron might be able to tread a third way between deference and hostility to Brussels and reach an acceptable compromise—largely, it seems in retrospect, so that they could go berserk when in February he returned from Brussels with only a handful of minor concessions over immigration and lawmaking powers.  Patriotic newspapers and politicians were outraged by Cameron’s efforts—even though the Tory press office passed around pictures of Cameron looking tired during negotiations so as to emphasize how hard he was trying.  The Daily Express called his deal a “joke.”  Andrew Rosindell, the Tory MP for Romford, said it was “a slap in the face for Britain.”

It is hard to see what more Cameron could have extracted from an arrogant and unbudging E.U. leadership.  But the Tories are a thin-skinned bunch.  They felt Cameron had taken them for fools and sold them out.  When, a few days after details of the deal emerged, Cameron walked into a tea room in the House of Commons, one of his MPs apparently turned to him and snarled, “cup of snake-oil, Prime Minister?”  The Tory ranks have never exactly warmed to Cameron, an Old Etonian with a touch of the bully about him and, worse, a modernizer.  The meagerness of his deal tapped into a long-standing sense among right-wingers that the Prime Minister is not, au fond, “one of us.”  It wasn’t just the old guard grumbling.  Tim Montgomerie, a young Tory commentator and founder of the influential ConservativeHome website, declared he was resigning from the party.  The Prime Minister’s E.U. fiasco, he said, was the “final straw” following the “abject failure on immigration, deficit reduction and inequality.”

The public seemed disgruntled, too.  Polls began to suggest, for the first time, that a majority might vote to leave the E.U.  What the anti-E.U. movement lacked was a sense of unity and an obvious leader.  The biggest and most influential “Out” group in the media is the Vote Leave campaign, led by Dominic Cummings, which is keen to distinguish itself from the more “Ukippy” Grassroots Out and Leave.EU campaigns.  The latter two, now joined, have more committed volunteers—think of them as a tea-party movement—and a charismatic spokesman in UKIP’s leader Nigel Farage, but they are toxic to the broader British public.  The Ukippers feel shunned by Cummings’s group and grumble about it to any journalist who will listen.

Vote Leave, by distancing itself from Farage & Co., has a broadly acceptable image.  But until Cameron’s renegotiation fell flat, the group didn’t have a supportive politician with that all-important name-recognition factor—someone who could lead the charge for “Brexit.”  That changed in February, when, in the space of two weeks, not one but two Tory titans declared that they would oppose the Prime Minister in the referendum.  First, Michael Gove, Cummings’s former boss at the department of education, jumped aboard the Leave ship.  In an eloquent speech, he said,

By leaving the EU we can take control.  Indeed we can show the rest of Europe the way to flourish.  Instead of grumbling and complaining about the things we can’t change and growing resentful and bitter, we can shape an optimistic, forward-looking and genuinely internationalist alternative to the path the EU is going down.  We can show leadership.  Like the Americans who declared their independence and never looked back, we can become an exemplar of what an inclusive, open and innovative democracy can achieve.

Then a few days later the mayor of London, Boris Johnson, probably the most popular Conservative politician in the country, and certainly the only Tory other than David Cameron to have won a significant election, declared he, too, was behind Vote Leave.  “I would like to see a new relationship [with Europe] based more on trade and co-operation,” he said.  “I want a better deal for the people of this country to save them money and to take back control.”

Both Gove and Johnson stressed that they had agonized over their decisions, and expressed their continued admiration for the Prime Minister.  But this was a slap in the face for David Cameron, and everybody knew it.  The referendum debate, which had until then been a boring statistical row, suddenly felt like a thrilling Tory civil war.  This sense was compounded a few weeks later when Duncan Smith resigned.

In a sense, Cameron has only himself to blame.  His leadership has since its inception been about moving the party away from the “swivel-eyed loons” who had made the Tories unelectable in the 1990’s and 2000’s.  But in “detoxifying” the Tory brand, he should have trodden more carefully.  He made it all too obvious that he regards real Tories as a bit of an embarrassment.  He cares more about pandering to the prejudices of rich Londoners and the left-liberal BBC.  Until this year, he has managed to suppress Conservative bitterness by being politically successful, and by keeping the divisive E.U. issue off the agenda.  But by promising a referendum on the E.U., he set himself up for a fall.  The referendum is having a similar effect on the Tories as Tony Blair’s Iraq war had on Labour: dividing the leader from almost half his MPs and the vast majority of his activists.  The Conservative brand is quickly retoxifying.

Cameron made another mistake in the run-up to the election.  In a TV interview he revealed, to the dismay of his advisors, that he would not stand for a third term.  This has meant that his second term as prime minister has been hampered by endless speculation as to who his successor might be.  And the E.U. referendum is turning into the battleground on which the next Tory leadership is fought.  The favorites are George Osborne, representing the continuation of Cameron’s modernizing legacy, and Boris Johnson, representing the anti-E.U. Small State brigade.  Johnson says he will not play a leadership role in the referendum—Gove will—but there is little doubt he will be the most talked-about Outer in the coming weeks.

If Cameron and Osborne prevail, they will almost certainly lose a large section of Conservative voters to UKIP.  If they fail, and Britain votes out, Cameron will stand down—and the party will be seized by guilt.  There will be a lot of economic anxiety as the markets come to terms with the reality of Britain going it alone, and the party will suddenly wonder why they just forced out their first successful leader in a generation.  Worse, Jeremy Corbyn is beginning to look like a credible challenger.