Major faces new crisis on Euro vote

Goldsmith referendum attack

PATRICIA WYNN DAVIES

Political Correspondent

John Major's leadership faced fresh challenges over Europe last night as the anti-EU Referendum Party poured scorn on the anticipated Government promise of a single-currency referendum, and backbenchers threatened a barrage of dissent if tomorrow's White Paper fails to take a tough line on reducing the powers of Brussels.

There were calls from senior Tories for the Government to negotiate with the anti-EU millionaire Sir James Goldsmith, whose self-financed Referendum Party is threatening Tories in marginal seats. It throws down a fresh gauntlet to the Government today with newspaper advertisements saying that Cabinet moves towards a referendum on a single currency do not go far enough.

They reproduce a letter from Sir James to candidates and supporters saying the Cabinet's expected agreement to hold a referendum only if it decides in favour of monetary union would be an "empty gesture . . . The referendum should allow for a full debate on the sort of Europe of which Britain wants to be part."

It continues: "The referendum on a technical aspect of [the EU] treaty, without a full debate on the fundamental issue, would be no more than a continuation of the fudge and subterfuge which has led Britain into a European construction diametrically opposed to that which was approved during the 1975 referendum on our membership of the EU."

The latest challenge to the peace John Major is trying to construct over Europe follows entreaties by Brian Mawhinney, Conservative Party Chairman, to Cabinet colleagues to look at ways of buying off Sir James.

John Redwood, the Eurosceptic former Cabinet minister and Tory leadership challenger, yesterday said he had urged the Government to contemplate up to three referenda: one on the single currency; another on any constitutional change at this year's Inter-Governmental Conference; and another that could garner the British public's wider views about Europe. Mr Redwood has urged the Government to negotiate with Sir James because of the threat of his party taking votes from Conservative candidates in marginal seats.

Meantime, another argument began to fester after a senior Eurosceptic demanded Cabinet ministers should be allowed to campaign against each other once the anticipated plebiscite was up and running. The Thatcherite anti- European Lord Parkinson, a former Conservative chairman, said the Cabinet should be free to campaign for either side in the referendum that is now expected to be promised within weeks.

The notion of Cabinet dissent stands in contrast to Mr Major's currently understood position - that if Cabinet decides a single currency was in Britain's economic interests then Cabinet would speak with one voice during the referendum campaign.

In the meantime, Malcolm Rifkind, the Foreign Secretary, said from a meeting of EU foreign ministers in Palermo that the Foreign Office report on whether the Government should hold the referendum would be presented to the Cabinet in the coming week.

Kenneth Clarke, the Chancellor, has been resisting a clear commitment to a referendum, backed by Michael Heseltine, the Deputy Prime Minister. Michael Portillo, the ultra- Eurosceptic Defence Secretary, has been opposed to the idea on the footing that it could encourage the view that the Cabinet would decide in favour of the currency, but is understood to have modified his views.

Mr Clarke joins other EU finance ministers in Brussels today to assess the latest forecasts for the European economy, on which a successful launch of the Euro in 1999 would depend.

The Government has decided to avoid a full vote when the IGC White Paper is debated next week, ordering only a light one-line whip to sidestep the embarrassment of being defeated on a full turn-out.

That did not stop a succession of Tory Eurosceptics displaying their angry advance opposition to what they expect will be a bland White Paper. Christopher Gill, the MP for Ludlow formerly deprived of the party whip, said the Government should "get real", adding: "For a long time it has been thought that I, and others and indeed the whole nation, are going to be satisfied with rhetoric . . . but we're past that stage now, we want more than rhetoric, we want to know `where's the beef'."

How the Cabinet line up

FOR A REFERENDUM

John Major

Malcolm Rifkind, Foreign Secretary

Brian Mawhinney, Conservative Party Chairman

Michael Howard, Home Secretary

Peter Lilley, Secretary of State for Social Security

Stephen Dorrell, Secretary of State for Health

Gillian Shephard, Secretary of State for Education & Employment

AGAINST

Kenneth Clarke, the Chancellor

Michael Heseltine, Deputy Prime Minister

BORDERLINE

Michael Portillo, Secretary of State for Defence

THE QUESTION

If a referendum were held the question most likely to be put to the electorate would be:

`The Government has decided that it is in Britain's interest to join the European single currency. Do you agree?'