The move undermined efforts by the Prime Minister's office to reassure Tory Eurosceptics that there was no threat to Britain's border controls, after the alarm was raised by the resignation of Charles Wardle, the former Home Office minister responsible for immigration.
The Commission's announcement led to protests in the Commons by Tory MPs and strengthened the support among Eurosceptic Tory MPs for Mr Wardle's campaign. The Government faced more embarrassment in the Commons over a Liberal Democrat motion calling for a referendum on Europe.
Mr Wardle is planning to step up his campaign for stronger guarantees for Britain's border controls with a personal statement to the Commons and meetings in cities across Britain.
Downing Street officials said Mr Major would use the British veto if the European heads of government sought to overturn an agreement given by them to Baroness Thatcher in 1985 to allow Britain to maintain border controls, in spite of signing the Single European Act, setting up the single European market.
The Prime Minister's office said that as the agreement was given by the heads of government, Britain had an absolute right of veto which Mr Major would use, if it was threatened. Officials also confirmed Mr Wardle's assertion that a small group of Cabinet ministers is already preparing a stand, if there is any threat to Britain's border controls at the Inter Governmental Conference in 1996.
"We are clear about our intention to maintain controls at ports of entry. That is very clear and unequivocal. . . It is the Government's business to be prepared for any eventuality," said a senior Government source.
But the Government's plans were thrown into doubt last night when the European Commission said it would put forward legislation to abolish internal border controls as part of its programme to be announced in the European Parliament tomorrow by Mr Santer, the man chosen by Mr Major to be Commission President.
It was seen at Westminster as a pre-emptive strike by the commission against action in the European Court of Justice by the European Parliament which has taken the commission to court over its failure to force Britain to abandon its border controls.
The Commissioner for the internal market, Italian Mario Monti, committed himself to legislation when he was grilled by the European Parliament earlier this year.
The commission programme will not describe exactly what action the EU's bureaucracy will take or its form, but technical experts are already studying the problem. The legislation will include a commitment to removing all internal border controls, according to Brussels sources.
The commission, the EU's executive bureacracy, says the EU treaty is quite explicit. Britain argues that it is allowed to keep controls on internal borders to check on immigrants from outside the EU.
Because the new legislation will be subject to a unanimous vote, Britain can prevent it taking effect by refusing to vote in favour in the EU Council of Ministers. Some officials suggested that the main reason why the commission was putting the idea forward was to deflect pressure from the European Parliament on to Britain and the council.
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