Has Rupert Murdoch just torpedoed the Tory party?

`The Sun' may have performed a service to the centre left by terminally weakening the Tories

MAYBE IT was just a circulation building stunt. Maybe it owed more to the paper's hunger - richly satisfied - for some short term free publicity than to a considered attempt by Rupert Murdoch to destabilise the Blair government's European policy. Maybe it won't last for ever.

Ministers who have exchanged views in the last 48 hours with the paper's editorial high command on its new anti-EMU campaign, advance each of these propositions at different times. In their optimistic scenario, Murdoch will allow the newspaper to continue fighting against the Euro only up to the moment he thinks he has lost the argument. And then, just as he finally followed his readers - not the other way round, remember - into supporting Labour, so he will back down on EMU.

Maybe. I suspect this underestimates the determination of the News International economic guru, Irwin Steltzer, and the paper's political editor, Trevor Kavanagh, let alone that of Murdoch himself. Nevertheless, almost any reaction to The Sun's resumption of its self-appointed role as arbiter of what the Blair government can or can't do, is better than panic. If you think it is all-powerful, try asking those who ran the Tory campaign in 1992 whether they think it was The Sun "wot won it". They don't. And because it is so up-front - some might say ludicrously so - it is at least, as hostile press coverage goes, less insidious than the slavish and wilfully uncritical attention the once loyal Daily Record has been mysteriously lavishing on Alex Salmond, the leader of the Scottish National Party, this week.

It is, nevertheless, a well-timed reminder of the forces Blair has to overcome, if and when he asks the country to back entry into a single currency. Of these, the most formidable, unfashionable as it to say so, remains not The Sun but the Conservative Party, which has 164 more MPs than any newspaper.

This week, the new Shadow Chancellor, Francis Maude, made a speech laying out his economic arguments against EMU in impressive detail. Maude's speech repays reading as much for what it doesn't say as what it does. It doesn't, as William Hague's Fontainbleau speech did, waste time conjuring the demon of EMU as the terminator of the British nation state. Instead, says Maude, we Tories are the true pragmatists. We want to wait - admittedly for a very long time - to see whether EMU works. It is a speech - while adamantly opposed to EMU - which nevertheless seeks to leave a route open to some form of post EMU future for the Tory party, and perhaps, just as importantly, for Maude himself.

What Maude also doesn't do, however, is to extricate his party from its commitment to oppose EMU entry in the next parliament. Since that is overwhelmingly the likeliest period for Tony Blair to hold a referendum on the subject, it simply confirms that the Tory party will stake almost all its hopes for recovery, assuming that it does not actually win the next election, on a victory in a referendum on the Euro after that. It's easy to dismiss that as no threat to Blair at all. Is even a slightly bigger Tory party, Sun or no Sun, any match for the combined forces of a Blair Cabinet, the CBI, the TUC and most of industry? But I doubt whether Blair will work on that assumption, if and when the campaign begins. The argument that he just won't have a referendum unless he's sure of winning sounds persuasive. But it's just possible that economic circumstances - say the volatility of sterling or a business clamour about being left out of the deepening single market - will force him to do just that. And there will, of course, be equal television coverage for both sides.

Which is where the apparently separate issue of electoral reform, and its link to EMU, comes in. It is now highly likely that Hague will get through the Euro-elections next year without the split that once seemed inevitable. The selections of Euro-candidates was entirely satisfactory for Hague. The candidates include many of the incumbent pro-European Tory MEPs. But to get selected they either supported, or at least equivocated about, Hague's opposition to the single currency. The result will be that he has a clear hand in framing an anti-EMU manifesto. (Two incumbents that bravely restated their firm support for EMU, John Stevens and Brendan Donnelly, were dumped.) It's just possible that a few firmly pro-EMU Tories might chance their arm, under the banner, say of Edwina Currie, by standing as independents. But the big beasts, like Kenneth Clarke, are very unlikely to give them backing.

At this stage. But a lot could change if there is a referendum vote in favour of any form of proportional representation for the Commons before the next election. Clarke, as it happens, is in favour of the first past the post system, and will campaign for it. But that doesn't mean that he wouldn't see the opportunity afforded by a new electoral system if the British people voted for one. It becomes much more likely that, at odds with the Tory leadership on the one issue which he regards more fundamental than any other, and with the prospect of serious money from business for a new pro-European right of centre party, he would consider forming one, made viable for the first time by the existence of a proportional electoral system.

The big men of Tory pro-Europeanism, not just Clarke but Heath, Howe and Heseltine, would not, of course, need a new party to campaign vigorously for EMU in a referendum. But some of their supporters, considering whether to risk their political careers by opposing the party line, might well need to feel they had somewhere to go. Unlike the SDP in 1981, they might well take the party's financial backers with them. Such a split, moreover, would guarantee the future prospect of a Commons with a permanent, built- in pro-European majority, because it would rob, with devastating consequences, the possibility of a right wing anti-European Conservative Party again winning power. And that in itself could well help to create the market momentum towards EMU entry. It may not be true as some in the City are saying, that the market reaction to a vote for PR will be to sell sterling. But it would go a long way to satisfy the markets that an EMU referendum is winnable.

Both EMU entry and electoral reform thus become part of the same picture of recasting, long term, the British political map. But it may also be that electoral reform becomes a desirable, possibly an even essential, component of a successful EMU referendum. The prospects, in the long run, of a Tory split have been made, perhaps, just a shade likelier by the new campaign started by The Sun, simply for the reason that it will make Hague even less inclined than he already is to appease the pro-Europeans like Clarke. It would be ironic if The Sun, after all, has performed its greatest service to the centre left by helping terminally to weaken the Conservatives, the one party hell- bent on delivering what Rupert Murdoch and The Sun wants.

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