She accused him of being “exceptionally difficult” to work for and of trying to thwart her pension policies and of previously championing the disability cuts he said made him quit.
“As far as I could tell, he appeared to spend much of the last few months plotting over Europe and against the leadership of the party and it seemed to me he had been planning to find a reason to resign for a long time,” said Lady Altmann.
“I truly believe it to be about Europe.”
However, Mr Duncan Smith denied the claim and accused enemies of trying to “besmirch” his motive which he insisted was solely his anger at Mr Osborne’s repeated cuts to working age welfare.
The one-time Tory leader’s devastating critique of Mr Cameron and Mr Osborne’s mistakes takes the party’s civil war to new heights and antiBrussels campaigners will be keen to exploit it.
Mr Osborne faces calls to be sacked over a string of policy shambles, and some say his hopes of succeeding Mr Cameron as party leader are dead in the water. Ukip MP Douglas Carswell, a former Conservative, said Mr Osborne now had “all the credibility of a Greek government bond” and his call for people to back staying in the EU would carry no weight.
“I genuinely don’t think Iain’s resignation was primarily motivated by Europe. He is very, very passionate about welfare reform,” said Mr Carswell.
Mr Cameron is predicted to face a leadership challenge from his divided party after the June 23 referendum, even if a majority heed his advice to vote to stay in. Thanks to the freedom granted by Mr Cameron to Eurosceptic ministers, Mr Duncan Smith said he did not have to quit to make his views on Europe clear.