Furious PM has Cash in hand

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John Major's anger at having his party pushed into Tuesday's Eurosceptic revolt by Sir James Goldsmith exploded last night when he forced rebel leader William Cash to reject further funding from the billionaire.

Alastair Goodlad, the Tory Chief Whip, ordered Mr Cash to back down in the teeth of a storm of criticism of his acceptance of financial support from Sir James while presenting Tuesday's Bill for a European referendum, the sole policy of the billionaire tycoon's Referendum Party. Mr Major is believed to be furious that Mr Cash, MP for Stafford, should accept funding for the European Foundation, of which he is chairman, from the head of a party threatening to field candidates against pro-European Tory MPs.

Mr Cash's referendum Bill, which stands no chance of becoming law, attracted the support of 78 Tory MPs in the biggest revolt against the Government's European policy. It called for a referendum on the restoration of powers from Brussels to Westminster, a formula backed by Sir James, for whom the Government's pledge of a referendum on a single European currency is not enough.

Mr Cash was referred yesterday to Sir Gordon Downey, guardian of MPs' ethical standards, by the Labour MP Andrew Miller, who asked for a ruling on to whether the ban agreed by MPs last year on paid advocacy had been breached.

Lord McAlpine, a member of the advisory board of the European Foundation, which admitted to "substantial" financial support from Sir James, rejected the Labour claim as a "complete load of rubbish", because "Bill Cash has been arguing for a referendum for donkey's years".

After being told by Mr Goodlad to reject Sir James's money or resign from the European Foundation, Mr Cash, issued a statement saying the Foundation's board of management "has determined that, pending the outcome of the forthcoming general election, it would not be appropriate for it to accept further donations from the Goldsmith Foundation".