Iain Duncan Smith has set out his vision of a Europe of "sovereign democracies".

Speaking in Prague the Tory leader made the case for a community of nation states rather than a continent ruled by any supranational body.

"New Europe must be built on a redefined relationship between power and people," he said. "Political power should be rooted in the national democratic institutions that bind people together in common purpose and so inspire loyalty."

Defending his party's eurosceptic stance he dismissed Labour's claims that he secretly wants to take Britain out of the European Union.

"Let me be clear, the Conservative Party does not want Britain to leave the EU," he said.

"We want to make it work. Anyone who says differently is telling a lie."

Duncan Smith, a leading Maastricht rebel in the John Major era, called for the British people to oppose the new European constitution.

"A constitution for the EU which would mean that no individual nation would be able to alter the highest laws by which it is governed," he said.

"It would put the making of these laws beyond nations. Surrendering them to supranational and unaccountable institutions and remote European judges.

"This constitution will change the European Union from being the biggest partnership of democracies in the world, to the biggest bureaucracy in the world."

Repeating his demand for a referendum, he said: "The truth is that we are as committed to building a new Europe of sovereign democracies as we are opposed to a United States of Europe.

"That's the real choice. The real debate. A vote against the constitution is not a vote to leave the European Union."

And he told his audience that he is not out to derail the European project.

"Conservatives want Britain's membership of the European Union to succeed," he said.

"And that is why - with others - we are committed to campaign for the new European vision I have set out today."

The opposition leader also called for a Europe which "focuses on the practical problems facing its peoples".

"A new Europe of democracies. Intergovernmental - not supranational. Equipped to compete in world markets," he said.

"Ready to overcome this century's challenges. The global challenges of poverty, disease and terror."