Tony Blair has urged the Conservative Party to abandon its "disastrous" policy on the European Union.

The prime minister called on Iain Duncan Smith to rethink his sceptical approach to EU affairs.

"There is no way that this country can be a leading player in the European Union unless it has a constructive and engaged policy," Blair said.

"British interests are about being inside the European Union, not being on the outside."

Blair argued that the British public knows "that this country's future, in the end whatever difficulties and doubts they have about Europe, lies at the heart of Europe and not on the outside of Europe".

But despite his pro-European comments in the Commons, there has been dismay among supporters of the single currency that no referendum bill was included in the Queen's Speech.

Liberal Democrat Treasury spokesman Matthew Taylor had earlier accused the government of "ducking" the issue.

"This delay comes at a huge cost," he warned

The prime minister also hailed the Queen's Speech as a coherent programme to tackle crime and anti social behaviour.

He said there would be investment and reform in the public services, measures that the Conservatives had approached.

Blair said the opposition was "out of touch and backwards".

"Not so much nasty or nice, simply out of touch and irrelevant," he said.

"The party opposite, as its shown once again today, has made the wrong decisions for the country and as a result of that will remain out of office for a very long time."