Britain settles fish quota row

A new deal on fish quotas between Britain and the European Commission could be sealed as soon as today, as EU leaders prepare for their watershed summit in Amsterdam tomorrow.

But Britain is still heading for confrontation with other European nations over the issue of the control of national borders, immigration and asylum policy.

Under the proposals, being negotiated last night, Britain would gain some economic benefit from the quotas which have been sold to other nations' vessels. The Commission is expected to agree to plans whereby a substantial proportion of the catches are landed in ports of the flag nations. A percentage of the crews of foreign ships fishing under quotas would also have to be nationals of the host country.

But the government concedes there is no prospect of recovering the rights to the quotas already sold legally. Ministers are optimistic that a declaration could be produced, but expect strong Spanish opposition.

Meanwhile last-minute attempts will be made to heal differences between France and Germany over the single currency rule book. Germany has refused to accept French attempts to promote jobs and growth by diluting fiscal austerity measures in the euro's stability pact.

Tony Blair, attending his first formal European summit, just six weeks after winning the election, faces a tough battle to ensure that the new treaty reflects Britain's demands on political reforms.

Government negotiators are still not satisfied that they have secured binding guarantees that Britain can maintain its frontier controls. The latest draft treaty text proposes a far-reaching transfer of powers to the EU institutions over immigration and asylum policy, including phased lifting of internal frontier checks.

Mr Blair will be pressed to agree to new EU defence powers. Differences also remain over extension of qualified majority voting and the use of a system of "flexible" decision- making, to allow some countries to integrate faster than others.

Euro-doubts spread, page 14