'Euro' row threatens Major

CONSERVATIVE Euro-sceptics threatened renewed turmoil, and raised the prospect of a Government defeat in the Commons this week after more positive comments from John Major on the single European currency yesterday.

Some Euro-sceptics threatened to abstain in a vote on European fisheries on Tuesday. Mr Major, who has a majority of five, could also lose the support of the Ulster Unionists.

At the Madrid EU summit Mr Major was his clearest yet in refusing to rule out a decision to join monetary union in the next Parliament. He also gave a strong indication that the Government is giving detailed thought to a commitment not to enter the single currency without a referendum.

The Prime Minister added that, if there were to be a referendum it "would be after the British Cabinet decided it was to recommend going in and it would then be for an endorsement of that in a referendum". That suggested the Cabinet might not be given a free vote - a move likely to inflame Euro-sceptics.

Jacques Chirac, the French president, added, when asked if the United Kingdom would join the single currency in 1999, that "we will be agreeably surprised by the realism of Britain".

Earlier Mr Major said he had "won the argument" at the Madrid summit by securing agreement to a special study of the adverse impact of EMU on relations between those who joined and those who did not.

The Prime Minister has twice before, in an interview with the Independent and subsequently in the Commons, indicated his unwillingness to rule out monetary union - which a large section of the Party including Euro-sceptic Cabinet ministers would like him to do. His comments 24 hours after the naming of the "Euro" and the confirmation of a timetable for EMU are a clear sign that the Government will now keep its options open into the election campaign.

The Chancellor, Kenneth Clarke, went out of his way on said on Friday night to say that the "only sensible time" for Britain to decide when to exercise its option whether to join or not join was when the list of countries eligible to join was identified by the EU in early 1998.

Bill Cash, the Euro-sceptic MP for Stafford, said: "The movement in opposition to the single currency has been gaining so strongly that the fact that the Prime Minister has said he will not rule it out in the lifetime of the next Parliament will be received with dismay. Many people believe this is the only way to win the next election."

Although Mr Major said he would need to be "persuaded beyond any doubt" - and is "not so persuaded yet" before entering a single currency, Mr Cash said he was "very disturbed indeed" by the Prime Minister's comments. He added that "the events in Madrid could influence" the outcome of Tuesday's vote. John Wilkinson, MP for Ruislip Northwood, said there would be "emotional overtones" to the vote "in the light of Madrid".

William Ross, the Ulster Unionists' agriculture and fisheries spokesman, said: "We do have problems with the total allowable catch in the Irish Sea. The government would be foolish to treat this lightly."

David Porter, Conservative MP for Waveney and a critic of the Commons fisheries policy, said: "I shall not be able to support the Government."

In Madrid Mr Major played down the impact of a pounds 40m advertising blitz through Europe, partly designed to excite support for the new "Euro". Around pounds 16m will be spent by the British government.