David Cameron faced embarrassment over his hardline European policy yesterday as one of his MEPs gave a warning that his stand was heading for "disaster".

Just days before the local and European elections, when all the major parties expect a battering over the expenses scandal, the Tory leader was criticised for his plan to leave the mainstream grouping in the European Parliament and join forces with a party which is anti-gay rights.

Caroline Jackson, the Europhile MEP for South West England who is standing down at the election, said Mr Cameron would "bitterly regret" the decision to withdraw from the European People's Party (EPP), whose members include Angela Merkel and Nicolas Sarkozy.

At the same time, a string of senior Tory figures have given a warning that the move risks damaging Britain's influence in the EU if the Conservatives win power.

Last month, The Independent on Sunday revealed that senior Foreign Office officials are also alarmed at the likelihood of a Cameron government leaving the UK isolated in Europe.

Mr Cameron has also said his government could hold a referendum on the Lisbon Treaty even if it has been ratified by every EU nation.

The criticism was all the more embarrassing for Mr Cameron, shifting the heat of controversy on to his party at a time when Labour and a weakened Gordon Brown government have been bearing the brunt of public anger over the expenses scandal.

Mr Cameron was in Warsaw yesterday to share a platform with the Czech ODS and Poland's Law and Justice (PiS) party. Leading members of the PiS have outspoken views on homosexuality, including banning gay rights marches.

Writing in the European Voice, the European affairs weekly, Ms Jackson said: "If you see an old friend about to drive full tilt into a brick wall, you will want to try to stop him. Today the appalled bystanders are the British Conservative MEPs who oppose David Cameron's pledge to leave the largest group in the European Parliament and form a new group, set apart from the continent's Christian Democrats and conservatives.

"The deed is done. Only those of us not standing again in June have the freedom to advocate an alternative policy. Most of us regard Cameron's policy as a disaster. Events are reinforcing our arguments."

Ms Jackson said the party's influence in the City would suffer, as well as in Europe.

Lord Patten, the former cabinet minister who became a European Commissioner, said: "It is an unwise decision and will reduce the Conservatives' influence in the European Parliament."

The former home secretary Lord Brittan, who also became a commissioner, said: "There is no doubt that the attempt to leave the EPP has annoyed a lot of the European leaders who are members of the EPP and are in government. It will make it more difficult to establish relations with them."

There was further criticism from outside the party. Tim King, the deputy editor of European Voice, said: "This is ideological, not pragmatic. On financial services legislation, for example, Conservative MEPs will be on the outside, which was not the case in the past. Cameron has been so desperate to escape the Christian Democrats that he is going to end up with far-right people, some of whom are racists. All that social liberalism of Cameron Conservatism is not the way that the Law and Justice party of the Poles goes."

Dr Anthony Zito, a European politics expert at Newcastle University, said: "If they follow through with this – and I remain sceptical that they will once they're elected – I think it would be extremely problematic. In terms of British politics they are ceding the ground operating in the European process to Labour and the Lib Dems."

Mr Cameron remained defiant yesterday over his plans, which he wants in place as soon as possible after this week's poll.

A spokeswoman for Mr Cameron said: "Caroline Jackson has always held these views, but these are not the views of the Conservative Party. None of this is new. This is absolutely the right thing to do, to pull out of the EPP and form a new grouping. You cannot say one thing in Britain and another thing in Europe."

Mr Cameron pledged to leave the EPP during his leadership campaign, winning over many Tory MPs from the Eurosceptic right and helping win. In a highly risky strategy, he has refused to order a U-turn despite the widespread condemnation.

The Liberal Democrat foreign affairs spokesman, Edward Davey, seized on reports that the Tories have met members of a Latvian party with links to Nazi sympathisers. Mr Davey urged the party to reveal with which parties they had been engaged in talks ahead of Thursday's Euro elections.

In a letter to the shadow Foreign Secretary, William Hague, he said: "The Conservative party's refusal to name its future partners in the European Parliament denies the public the information they need to make their choice at this election. This wall of silence, despite your many secret meetings with potential partners, is utterly disingenuous."

He went on: "Political groups in the European Parliament are the platform for joint political agendas. In Brussels and Strasbourg, the politics of the wider group often informs the voting choice of the national delegation of MEPs. Is it not then grossly hypocritical for you to leave the European People's Party on the basis that they do not reflect your views, only to go about obscuring those parties you will work with after 4 June?

"Is this because they are reportedly made up of homophobes, anti-Muslims, climate change deniers and Nazi sympathisers?

"The electorate is entitled to know what secret deals have been made. What manifestos have been prepared behind closed doors but not put before voters? Where will you stand on climate change? On civil rights and equality? On the economy?

"More radio silence from Conservative HQ will merely confirm the suspicions of many that you are ashamed of your new partners and will do everything to keep them hidden away until after the election."

Caroline Flint, the Europe minister, said: "The shadow Business Secretary, Ken Clarke, has previously described David Cameron's Europe policy as 'head-banging' and now other senior Conservative grandees have described it as a 'rigid commitment to impotence', 'unwise' and 'a mistake'.

"David Cameron should listen to the experienced voices in his party, put the national interest first, and re-think his decision to leave the European People's Party.

"The choice for voters on Thursday could not now be any clearer: vote for influence with Labour or isolation with the Conservatives."

The row came as research for The Independent on Sunday revealed that Labour and Liberal Democrat MEPs have represented the best value for money for taxpayers, while Ukip's members have been the worst.

All MEPs have netted themselves £700,000 each over the past five years in pay and office expenses –not including staffing, travel and attendance allowances. However, an examination of the amount of work each MEP has carried out, including written questions, taking part in speeches and legislation, shows that their work rate has varied considerably.

Robert Kilroy-Silk, the maverick independent and ex-Ukip MEP, cost the most of all British MEPs, at £5,965.71 per minute of speaking, based on the £41,760 he claimed for signing in to the chamber. The cheapest was David Martin, Labour MEP for Scotland, who cost £90.21 per minute. He spoke to the European Parliament more times than all 10 Ukip MEPs combined.

In total, Ukip MEPs passed fewer motions, sat on no committees, filed fewer questions per head and spoke less than any of the major parties. A typical Labour MEP spoke twice as often and tabled five times more questions than a typical Ukip MEP.

Conservative MEPs put in the least activity of the three major parties. They spoke less, asked fewer questions and sat on fewer committees on average, yet claimed more attendance allowance than the other major parties.

Labour MEPs were slightly ahead of the Liberal Democrats in how much they spoke, while Lib Dem MEPs asked more questions. SNP MEPs beat both parties on these counts.

Britain in Europe: Ten leading MEPs

Robert Kilroy-Silk The former chat show host known for his stint in the I'm a Celebrity jungle was elected with Ukip in 2004 but quit to form Veritas. He now sits as an independent.

Daniel Hannan The Conservative MEP became an internet sensation in March when his European Parliament tirade against Gordon Brown became YouTube's most-viewed video.

Caroline Lucas One of two UK Green MEPs, she became the face of the political organisation in England and Wales after being elected the party's first leader last year.

Nigel Farage The Ukip leader has courted controversy, notably by remaining seated during a standing ovation for the Prince of Wales when Prince Charles addressed MEPs last year.

Roger Knapman Farage's predecessor as Ukip leader, who led the party when it voted against admitting east European states into the EU, he was embarrassed in 2006 by the revelation that Polish workers he employed were sleeping in the attic.

Michael Cashman The former Eastenders actor has been an MEP since 1999, but is still better known as his on-screen character Colin Russell, famous for having the first on-screen gay kiss in a soap opera.

Godfrey Bloom The Ukip MEP got off to a rocky start in 2004 after getting a seat on the women's rights committee. He told journalists women did not 'clean behind the fridge enough'.

Giles Chichester The South West member stepped down as the leader of Conservative MEPs last year after an expenses scandal. An inquiry cleared him of wrongdoing.

Tom Wise The Ukip MEP appeared in court with his researcher last month on charges of false accounting and money laundering, charges that both deny.

Mary Honeyball The web-savvy Labour MEP spreads the 'Honeyball Buzz' and voices her views on women's rights through her blog and regular Tweets.

Kate Youed