Iain Duncan Smith has warned of the growing rift between Europe and America since September 11.

With frosty relations between Washington and Berlin, and France playing a key role in softening the latest United Nations security council resolution on Iraq, the Conservative leader warned that rifts would only serve to help common enemies.

In a speech to British American Inc on Monday evening, ahead of a key NATO meeting in Prague later this week, he also called on the European Union to concentrate on realities rather than "dreams".

"One of the most dangerous developments since September 11 last year is the way that Europe and the United States seem to have been drifting apart," Duncan Smith said.

"Dictators like Saddam Hussein must be delighted when they see splits between Washington and the capital cities of Europe."

He criticised EU governments for appearing "more preoccupied with dreams of constructing the post-Cold War Europe, rather than with the realities of the world beyond".

And he added that NATO, often hailed as the successful military alliance in history, was "under threat" from the EU.

"Some are pressing for the new EU constitution to take over more and more of NATO's powers and functions.

Some are pressing for the EU to adopt the same mutual defence pact, that is currently NATO's core purpose.

"What future has NATO if the EU continues to take over more and more of NATO's key functions, even its founding principle?"

The Tory leader said Europe should do more to provide for its own defence, but not at the expense of transatlantic ties.

"The European security and defence policy now hangs like a sword of Damocles over NATO supremacy in Europe."

He urged NATO leaders to use the forthcoming summit to "set things straight" and highlighted the controversial issue of American plans for missile defence.

"Here is a real chance for NATO to be the vehicle to protect homes and families in both North America and Europe. To make global missile defence work, NATO would have to be invented if it did not already exist."