Horsham MP Francis Maude has resigned from the Thatcherite No Turning Back group, along with Shadow Chancellor Michael Portillo.
Senior Tory sources said the pair were angry that an account of a dinner at one of the influential group's meetings had been leaked to the Press.
Mr Portillo was said to have been savaged at last week's meeting by angry right-wingers because he had abandoned the Tories' "tax guarantee", promising to cut taxes over the lifetime of a parliament.
A Tory source said today that Mr Portillo and Mr Maude - the Shadow Foreign Secretary - believed if they could not have a policy discussion in private there was little point continuing with the group.
A Labour spokesman, however, said it showed the Conservatives were continuing to move to the right.
The No Turning Back Group was formed in 1985 to defend the free-market policies of Margaret Thatcher's government.
There were doubts in Westminster last night about its continued influence without two of its leading members.
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