Tony Blair told MPs yesterday that "the lunatics have finally taken over the asylum" under Iain Duncan Smith.

The prime minister attacked Conservative policies which he said could threaten Britain's place in the European Union during his weekly grilling in the Commons.

He added that the Tories would rule our euro membership as an act of "dogma" - even if it was in Britain's economic interests to join.

"That is not a serious policy for government," he said.