One minister said the timetable for the single currency "will change the face of British politics", causing deep splits in the next Government, whether it is Labour or Tory.
The Labour leader is planning to introduce legislation on devolution for Scotland and Wales in the first 12 months. But ministers are convinced that a Labour government would be forced instead to introduce egislation in 1997 to guarantee Britain's opt-out from the single currency.
The realisation that legislation will be needed in the early months of the next government has intensified the pressure by Euro-sceptics in both parties for the single currency to be ruled out before the next election.
Euro-sceptic Tory MPs believe John Major could be forced into a compromise at the election, to rule out Britain joining the first wave of countries to join a single currency, although the Prime Minister yesterday reinforced his determination not to change policy.
That stance was given a fillip yesterday when Brussels revealed that a huge underspend will allow it to repay more than pounds 500m into British government coffers.
Mr Major has reached a pact with Kenneth Clarke, the Chancellor, Malcolm Rifkind, the Foreign Secretary, and Michael Heseltine, the deputy Prime Minister, not to rule out a single currency. The Prime Minister has pencilled in May 1997 for the next election. The Maastricht treaty requires Britain to decide whether to join European monetary union by January 1998.Reuse content