Euro gaffe wrecks Tory unity

John Major's government was back on the ropes again last night, after Stephen Dorrell, the Secretary of State for Health, smashed the fragile Cabinet agreement on the European single currency.

Ministers appear to be in a state of open mutiny against the Cabinet's January agreement on the single currency; that British participation is "very unlikely but not impossible" at the start of 1999.

Mr Dorrell, who received a public reprimand from the Prime Minister for saying last month that the Tories would abolish any Scottish Parliament set up by Labour, said yesterday: "We shan't be joining a single currency on January 1, 1999." For good measure, he then added that it would not be "possible" to join because a Tory government would not enact the necessary legislation.

While Europe was not an issue in the Wirral South by-election, the voters were clearly contemptuous of a Cabinet that was disunited, and Mr Dorrell showed yesterday that the lesson has still not been learnt in the highest reaches of government. One former minister told The Independent last night: "This smells of death wish."

John Prescott, Labour's deputy leader, said: "The question is, has Stephen Dorrell made another gaffe or is he announcing an official change of government policy on the single currency?

"He is the first Cabinet minister to say categorically that the Government will not join in 1999. Does John Major agree? Does Kenneth Clarke agree? Does Michael Heseltine agree? Did any of them know he was going to say this? ... Why did Michael Heseltine and Brian Mawhinney not say this when they were interviewed on television earlier today? This smacks of disarray at the heart of government."

Mr Dorrell's truce-shattering remarks came in a London Weekend Television programme with Jonathan Dimbleby - while Mr Heseltine, the Deputy Prime Minister, was telling BBC television that the Cabinet was united. "It's preposterous to suggest that they're at each other's throats," Mr Heseltine told On the Record.

Mr Major had won an opt-out on European economic and monetary union, "so people could make up their mind in the light of the facts", he said.

However, Mr Dorrell told Mr Dimbleby: "The Government's position, I would have thought, on the single currency is now as clear as you could ask for it to be. And that is: first of all, no single currency without a referendum: and, secondly, we shan't be joining a single currency on January 1, 1999, but we think that Britain ought to continue to participate in the discussion and take a decision subject to a referendum on Britain's interests alone."

When Mr Dimbleby offered the minister the chance to retract, Mr Dorrell went further, saying: "I said we shall not be joining on January 1, 1999, because we shan't be putting the legislation through on the timescale that makes that possible."

Told that was the first time a Cabinet minister had said such a thing, that it would be impossible, Mr Dorrell came back for a third bite, saying: "I think you're right to say it is a vanishingly small possibility of us joining on January 1, 1999."

Last month, Malcolm Rifkind, the Foreign Secretary, provoked outrage from the Chancellor, Kenneth Clarke, and Mr Heseltine when he said that, on balance, the Government was "hostile" to the principle of a single currency. He was later forced to agree an early morning statement with the Chancellor, saying that ministers were hostile to a single currency based on "fudged" criteria for membership.

Last night, No 10 refused to get involved in a matter that clearly affected a breach of the rules of Cabinet collective responsibility. But Conservative Central Office issued a statement from Mr Dorrell saying: "The Government has made its position on joining the European single currency extremely clear. I entirely agree with the Government's position, and no words I used on the Dimbleby programme were intended to question it. We have not ruled out joining the single currency on the 1st of January 1999. We have said that we believe the likelihood of doing so is extremely small."

Mr Dorrell's latest gaffe completed a fistful of Sunday setbacks for the Prime Minister: junior ministers threatened open defiance against the single currency; Sir Edward Heath again attacked government policy; former Tory Treasurer Lord McAlpine accused Mr Major of being at the heart of the conspiracy to get rid of Baroness Thatcher in 1990; and Mr Heseltine dismissed John Redwood as a person of no consequence.