The former deputy prime minister and lifelong pro-European said the party has become "infected by the virus of extremism" and he cannot endorse its support for leaving the EU.
In an article for The Sunday Times, he said: "The reason for my experiment with the Lib Dems is, of course, the government's position on Brexit.
"I cannot, with a clear conscience, vote for my party when it is myopically focused on forcing through the biggest act of economic self-harm ever undertaken by a democratic government."
His call for the Tories to reclaim the political centre ground was echoed by former prime minister Sir John Major.
He told the paper that the need for an inclusive Tory party is "greater than ever", and warned: "The middle ground of politics is empty."
Lord Heseltine made clear he would resist any attempt to force him out of the party over his stance on the election on 23 May.
"I have no intention of being forced out - or resigning from - a party that has been such an important part of my life," he wrote.
"I will remain a member of my local association and, unless told otherwise, will continue to take the Conservative whip in the Lords."
He suggested the only alternative to a no-deal Brexit, or a "Marxist government" led by Labour's Jeremy Corbyn, would be for the Conservatives to put any final deal to the public in a second referendum.
He added: "With the prospect of a descent deeper into this darkness for our party, it is the only way to solve the riddle, to secure a stable majority in Parliament and a lasting settlement for the country."