TORONTO - With election day in Ontario just days away, frustrated insiders close to the beleaguered Progressive Conservatives -- rattled by fallout from the religious school funding firestorm -- are laying the blame for the party's campaign-trail struggles squarely at the feet of their leader.

John Tory, long billed as the man who would rescue the Conservatives from the lingering memory of the Mike Harris era, has instead become the party's biggest liability, they say, thanks to a single issue: his ill-advised proposal to fund faith-based schools.

And as the vote draws closer, at least two veteran caucus members fear the Conservatives no longer have a chance to form even a minority government. As a result, the party is asking itself some tough questions.

How, they wonder, could Tory -- a veteran of Ontario's political backrooms since the days of Bill Davis and the Conservative dynasty known as the Big Blue Machine -- fail to anticipate the ensuing controversy and how it would play into the hands of the incumbent Liberals?

Did he genuinely expect, after weeks of staunchly defending the proposal, that giving his caucus members the freedom to effectively kill it by voting it down in the legislature would undo the damage wrought by months of sustained criticism and media attention?

"People thought John Tory was going to be the new guy -- they all believed in him and they had a lot of faith in him," said one veteran Conservative caucus member.

"Nobody wanted to vote for McGuinty. But this just turned it around. I just can't believe it."

One frustrated Conservative member said it will take a "miracle" for Tory -- who also has to worry about a difficult battle against Education Minister Kathleen Wynne in his hand-picked riding of Don Valley West -- to win his seat, let alone become premier.

While strategists within the Tory campaign say the leader's free-vote strategy did mitigate the damage somewhat, others remain baffled about why the policy was adopted in the first place and why it took so long for Tory to distance himself from it.

Although Tory spent months defending his plan as a "matter of principle," of equity and fairness, his hands were tied three years ago when he promised to address the issue when he ran for the party leadership.

Under pressure from right-wing opponents Frank Klees and Jim Flaherty, who wanted to restore the unpopular private-school tax credit axed by McGuinty, Tory said he agreed to offer some form of support to private schools.

"That is a commitment that I honoured because I believe that when you make these kinds of commitments, it is important to honour them," he said earlier this week.

Those schools would have to be faith-based, teach the provincial curriculum, hire accredited teachers and administered standardized tests, he said. Given that prominent Liberals like McGuinty and Wynne have in the past espoused similar views, Tory felt it wouldn't be a tough sell, insiders say.

Months before the writ was dropped, Tory tried to soften the idea by announcing he would form a commission headed up by former premier Davis, his mentor and close friend, to study the issue.

But the Liberals had already come out swinging. McGuinty called the plan a "segregation" of children and said Tory planned to take $400 million out of existing public schools to fund the religious institutions.

"It's like starting a forest fire and it caught on very quickly," another Conservative veteran said.

At the same time, Tory was being warned that the policy could torpedo his chances in an election that was widely considered his for the taking. Prominent political historian Michael Bliss wrote to Tory several times during the summer, warning him he was "sleepwalking towards electoral disaster."

Bliss never received a reply.

He said Tory surrounded himself with "young smart-asses" who denied him the sense of history that makes it clear it's a mistake to mess with people's public schools or to advocate crossing the streams of church and state.

"The McGuinty government dug itself into so many holes, this election was Tory's for the taking," said Bliss, a professor emeritus at the University of Toronto. Tory, he said, has snatched defeat from the jaws of victory.

"This was suicide," Bliss said. "I've never seen a more suicidal campaign."

Adding fuel to the fire

The party tried to douse the controversy early, the week before the writ was dropped, by holding an event at a Jewish school so Tory could highlight the policy early.

Instead, his musings that creationism could be taught in Christian schools on top of evolution and "other theories" just added fuel to the fire.

As the days went on, "no matter what we did, that was the focus each day," said one of Tory's top advisers.

Concern about the issue was "growing in intensity" - something that wasn't lost on any of Tory's advisers, caucus members or candidates.

"We're not stupid," the adviser said. "We weren't sitting here saying, 'It's okay, carry on.' . . . It was frustrating. It became the elephant in the room."

Veteran caucus members began to mutiny, privately warning Tory they were going to speak out against the policy to ease the concerns of their own constituents unless something changed.

Polling in those ridings found the policy to be just as unpopular as the caucus members had warned. All the while, Tory continued to pound the pavement with the media in tow, getting a tongue-lashing from voters about the issue at virtually every stop he went to.

Yet he stuck to his guns, convinced voters would embrace his mantra that "you can't go wrong doing the right thing." A few days after maverick Conservative Bill Murdoch openly opposed the policy and said he would vote against it, Tory finally seemed to see the light.

He attributed his change of heart to the upbraiding he received from voters, but party insiders say he knew he had no choice. He spent days huddled with advisers, trying to work out how to maintain his staunch support for the policy while giving his caucus some badly needed breathing room.

In conference calls with his caucus and candidates, Tory said he was urged to drop the policy entirely or put it to a referendum. Minority rights shouldn't be decided by the majority, Tory said, nor was he interested in killing a policy he believed in.

The free vote was a "logical conclusion for John to reach," said one Conservative caucus member. "We (had) to . . . allow the dust to settle on this."

Tory gave his war room the go-ahead to book the economic club for Monday, Oct. 1. They wanted to explain the "significant decision" on his terms, in a detailed speech without the hurried nature of a press conference or scrum.

"This was never the most important issue to me nor is it to the people of Ontario," Tory told reporters after the speech. "I'd like to move on to discussing some of the real issues."

The about-face - party spin-doctors vehemently insisted it wasn't a flip-flop - was a "big gamble," said pollster Greg Lyle. But the Conservative hand was forced when Tory's strong, poised performance in the televised leaders' debate failed to move the polls, he said.

"The status quo wasn't really an option," said Lyle, of Innovative Research Group. "The numbers were simply too strong to ignore."

Tory's top advisers admit they could have offered a free vote earlier, but say the impact of the Oct. 1 announcement has been palpable. Phone calls have started coming in, requesting signs and donating money. Volunteers are more enthusiastic and optimistic.

"The phone calls turned 180 degrees from negative to positive," said one of Tory's top advisers. "I've never seen anything like it."

Others feel the fight has already been lost. A longtime party stalwart grumbled that the flip-flop has breathed new life into the divisive issue, allowing it to continue dominating headlines.

"It doesn't look too good. He may not even win his seat," said one caucus veteran, adding the faith-based issue remains top of mind for voters when he goes door-to-door.

"It's still out there."