Lord Hague said the party was now “more evenly divided” than it had been during the debate over whether Britain should join the euro during the 1990s.
And the former Conservative leader urged the current leadership to bar ministers from the Cabinet if they resorted to “personal attacks” during the campaign.
His comments come after several senior Tories declared their support for a “Brexit” including Boris Johnson, Michael Gove and Iain Duncan Smith.
The former foreign secretary told the Telegraph that many Tories had found the decision “agonising” and voters would hear “utterly contradictory statements” about issues such as security and the economy from Government ministers in the next few months.
He said the Tories are the party that will have to deal with the consequences of either a vote to remain or to leave and will have to work together whatever the outcome.
He said: ”So, just at a point when Conservatives are most divided they also have their greatest responsibility in decades: if they fail to win the next general election the national consequences would be grave indeed.
“A sustained battle within the party can open wounds that take a generation to heal. Just look at Blair and Brown and the wreckage they left behind.”
Lord Hague said Tory ministers should campaign only during their spare time, praise each other and not resort to criticising individuals in order to avoid a schism.
He added: “It should be understood that there will continue to be a place in the Cabinet for ministers on both sides of this argument, but not for those who stooped to personal attacks or stoked a feud.
“So even if the result is to stay in the EU, the talented minister who argued eloquently for leaving should know he or she will have a good job in the Cabinet; the minister who criticised their colleagues should know their future role is being the new special representative to warlords in the Khyber Pass.”
In the Commons on Monday, David Cameron made his displeasure at Mr Johnson”s decision to back Brexit clear in a scathing attack on the London mayor.
The Prime Minister said his own pledge to step down at the general election meant he had “no agenda” other than the interests of Britain – a dig at Mr Johnson”s leadership ambitions.