Former PM Brian Mulroney, seen testifying before the Commons ethics committee in 2007, insists he will remain a member of the Conservative party until he dies. (Fred Chartrand/Canadian Press)

Simmering tensions between Prime Minister Stephen Harper's government and predecessor Brian Mulroney are boiling over, with party sources saying Mulroney is no longer a Conservative and the ex-leader insisting he will be a party member as long as he draws breath.

Senior Conservatives contacted select reporters Tuesday to tell them Mulroney had effectively torn up his party membership card.

"I can confirm he is no longer a member," one Conservative source said.

The source said Mulroney called a senior party official two months ago to ask that his name be pulled off all party lists and materials and that communications with him cease.

"It was a call made at a senior level," the source said. "As is the case with anyone, we complied and did so."

Mulroney briskly fired off an unequivocal statement through his public relations team.

"I remain a member of the Conservative party and I will remain so until the day I die," Mulroney said.

Harper's cabinet told to avoid Mulroney

The bizarre dispute over Mulroney's party membership is a sign of just how bilious the relationship between the Harper government and Mulroney has become.

Mulroney is at the centre of a public inquiry investigating business transactions between him and beleaguered arms lobbyist Karlheinz Schreiber. Initially, the former prime minister said he would eagerly appear at any public inquiry into those dealings, and Harper obliged him. Mulroney's lawyers have since tried to limit that inquiry's scope.

Harper's announcement of the inquiry in 2007 put a swift end to a rapprochement between the two men that saw each of them publicly praise the other after Mulroney played a key role in the re-assembling of the Conservative party in 2003.

Harper ordered members of his cabinet, caucus and government — many of whom had been Mulroney's life-long friends — not to have any contact with the former prime minister.

Harper used to praise Mulroney

The Conservative source said Mulroney's reported desire to be expunged from the party roster was out of dissatisfaction with the inquiry process.

A Mulroney confidante, speaking on condition of anonymity, called the party's claims preposterous.

"He's part of the history of this party. You can't rewrite history. If they're worried about branding, then shut the inquiry down. They're the ones who called the inquiry."

Mulroney is the only party leader in the last century to win back-to-back majority governments as a Tory, in 1984 and 1988. He was a key behind-the-scenes figure in the merger of the Canadian Alliance and Progressive Conservative parties. That work helped forge a relationship between the current and the former prime ministers. Harper once referred to him as a mentor, and in April 2006 delivered a glowing tribute to him.

"I am delighted to be here with you this evening to pay tribute to a man who is increasingly recognized for all his achievement as prime minister," Harper said, later mentioning Mulroney in the same breath as Pope John Paul II and Ronald Reagan for his efforts to end communism.

Conservative MPs used to regularly bring up Mulroney and his economic policies in the House, directly connecting their party to the former PM.

Cash payments questioned

The good relations came to grinding halt in August 2007, when Schreiber alleged in court documents that Harper was supposed to play a role in his effort to avoid extradition. Harper had hosted Mulroney at the prime minister's retreat in Harrington Lake, Que., in 2006 and Schreiber claims he had asked Mulroney to raise personal issues with the newly elected prime minister during that meeting.

At the crux of the current inquiry is Schreiber's allegation that Mulroney agreed to lobby on behalf of a German arms company while still in office in 1993.

Schreiber accuses Mulroney of not living up to a business arrangement that saw Mulroney receive at least $225,000 in cash payments. Mulroney admits to receiving cash and putting it into safety deposit boxes — a move he said he regretted — and he said he did live up to his end of the bargain by communicating with officials in China and Russia.

Mulroney denies he received money from Schreiber while still in office.