In a result that left many Conservatives shocked, and some Labour and Lib Dem officials openly delighted, a final vote of Tory MPs saw Badenoch come first, just ahead of Jenrick, with Cleverly last.
Cleverly, who is the shadow home secretary and was the last remaining candidate from the party's centre, had topped the previous round of voting on Tuesday and was the favourite to win, including in the final round among party members.
But the results, announced by Bob Blackman, chair of the party's 1922 Committee of backbenchers, saw Cleverly lose support. He went from 39 votes on Tuesday - just one away from the 40 needed to guarantee a spot - to 37.
Badenoch went from 30 votes on Tuesday to 42. Jenrick moved from 31 to 41. The final decision will now be made in a ballot of Conservative party members, with the result announced on 2 November.
The result was met with dismay among some Tory MPs, many of whom are on the more moderate One Nation wing of the party, yet are left with a choice between two rightwingers as a result of attempts at tactical voting. "We've just been too clever by half," said one.
Another Tory MP said they were now getting messages from local members saying: "What the hell are you doing?"
Party insiders said it was striking how many more moderate party members had engaged with the contest, which added momentum to Cleverly's bid.
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