The bold plan could signal an attempt by Mr Blair to break up the three- party structure and leave the Eurosceptics isolated. It aims to create the most formidable political consensus since the referendum on the Common Market in 1975.
Last night, Mr Heseltine, former Conservative deputy prime minister, offered his backing for the cross-party move. He told the Independent on Sunday: "Undeniably people are talking about the possibility of an all-party grouping to stress Britain's self-interest in Europe."
Mr Heseltine said he would take part in a group, "if it were designed to emphasise the benefits to this country of being part of the EU and to outline options for participation consistent with Britain's self- interest".
Although there has been no formal approach to Mr Clarke, the former Chancellor, he is expected to come on board. Approaches have been made to him through intermediaries and he has made it clear to friends that he will not abandon his commitment to campaign for Europe. He has promised to promote potential benefits of a single currency.
The backing of senior Conservatives will embarrass William Hague, Leader of the Opposition, who has pledged opposition to European Monetary Union in this Parliament and the next. Allies of Mr Ashdown said the Liberal Democrat leader would be eager to play a leading role in a platform to promote Europe. Liberal Democrats see the initiative as a precursor to an all-party "yes" campaign in any referendum on the single currency.
Mr Blair does not see the committee as concerned with economic and monetary union in this Parliament, but with the broader issue of Britain's role in Europe. His allies see it as a forum to redress the anti-Europe bias of much of the media - especially during Britain's EU presidency.
The group's functions are likely to be to educate the public about the benefits of Europe and promote a national debate on future participation and reforms.
Pro-European Tories believe that the Government is unlikely to gain the support of Chris Patten, the former Tory party chairman and Hong Kong governor, who endorsed EMU this month. But Mr Blair may get some younger Conservative Euro-MPs, and, possibly, pro-Europe Tories among new entrants to Parliament.
Sceptics think the move by Mr Blair is a reaction to the exclusion of Britain from key decisions on EMU, after he ruled out entry into the first wave in 1999. Others see it as a way of strengthening discord within the Tories, which might lead to a split in the Conservative Party in the run-up to next year's Euro-elections. But the Conservatives noted that Labour was careful not to exploit the letter written by Tory "grandees" which backed the principle of monetary union.
Meanwhile, Mr Ashdown, who sits on a government cabinet committee on constitutional reform, moved to ease concerns in his party about the prospects of further links with the Government. He will offer party members a political "double lock" as a guarantee the party will not race into a coalition with Labour.
Mr Ashdown is to promise, first, not to do anything inconsistent with party aims and values but, second, not to advance the relationship with the Government without the backing of the party's MPs and the consent of the members. The strategy was agreed at a meeting of the party's executive committee last Thursday and a document outlining the party position will go to its spring conference in March.Reuse content