Theresa May has been accused of “burying her head in the sand” over Islamophobia in the Conservative Party.
Former party chair Baroness Warsi said the PM had failed to “acknowledge” or “tackle” the problem and this was “symptomatic” of her wider leadership.
She spoke out after a council candidate who made what she called “vile” comments was reinstated by his local party in Harlow, Essex.
Peter Lamb has now quit the Tory Party, following the outcry.
A spokesperson for Conservative head office said the party always acted “decisively” when cases came to light.
But Baroness Warsi, who was the UK’s first female Muslim cabinet minister, has said her party had “turned a blind eye” to prejudice and become “institutionally Islamophobic”.
She suggested the “rot had set in” several years ago and accused senior party officials of being “in denial” and presiding over an “opaque” complaints process.
In a personal attack on the prime minister, she said Mrs May had “failed to tackle the problem head on”.
“She doesn’t listen, she fails to acknowledge when there is a problem,” she said.
“It’s probably symptomatic of the way in which her leadership has dealt with other matters.
“Burying your head in the sand is not going to make problems go away.”
She said efforts to modernise the party had “gone into reverse” since Theresa May succeeded David Cameron as leader, but she ruled out quitting the party, as others have done.
“If my party’s going though a process of ‘re-Ukipification’ of itself, then it’s my job to stand within that party and fight to bring it back to the centre ground.”
She has written to the party’s chief executive Sir Mick Davis urging him to “show leadership” on the issue, because Mrs May and party chairman Brandon Lewis had not.
She said Sir Mick, a former chair of the Jewish Leadership Council, had a “long history of fighting bigotry” and was “uniquely placed to understand consequences of unchecked hate”.
Baroness Warsi has been warning about anti-Muslim prejudice in the party for years.
Her latest intervention follows a row over former candidate Peter Lamb, who was was due to stand in the Staple Tye ward, in Harlow, Essex, in May’s local elections and had previously stood in the Toddbrook ward.
Mr Lamb was disciplined by the party after it emerged that he had posted a message on Twitter in 2015, saying “Islam like alcoholism [sic]” and “the first step to recovery is admit you have a problem”.
Later in the same year, he tweeted: “Turkey buys oil from ISIS. Muslims sticking together,” adding: “Do they want us to call ISIS Daesh now so that we don’t associate them with Islam?”
Mr Lamb was reinstated as a candidate but local party sources said he had quit the party earlier on Tuesday, following the row about his comments.
‘Party in denial’
In a statement on Twitter, he apologised for the remarks.
“Some time ago I tweeted a comment about Islam. The tweet was aimed at the Extremists that have hijacked Islam and are cowardly hiding behind the religion, I would like to apologise to those who follow the religion peacefully and are contributing to the diversity of the UK,” he said in a tweet.