John Major will today attempt to resolve a Cabinet split over a referendum on the European single currency amid the growing threat of a new rebellion by Euro-sceptic Tory MPs.
The Prime Minister had a meeting last night with Kenneth Clarke, the Chancellor, who is holding the line against a pledge to allow a referendum. Other senior Cabinet ministers believe a referendum is the only way to defuse a Tory backbench revolt over Europe.
Brian Mawhinney, chairman of the Conservative Party, warned senior Cabinet colleagues at a meeting earlier this week that a clear line on a referendum had to be taken. But the split in the Cabinet was too deep to resolve the issue.
The Government faces defeat in a Commons vote next Thursday on its White Paper on the European Union Inter- Governmental Conference. The White Paper is expected to be approved by the Cabinet today and published at the start of next week.
Some MPs say they will be unable to support the Government if the White Paper merely restates existing policy - which ministers confirmed yesterday. If the Government is defeated, Mr Major would be forced to hold a confidence vote - an event which was averted by one vote in the debate on the Scott arms-to-Iraq report last month.
There is growing unrest among Tory Euro-sceptic MPs who have been angered by Mr Clarke's saying he was "sympathetic" to a single currency, a proposal by Malcolm Rifkind, the Foreign Secretary, for a foreign affairs spokesman for Europe, and the European Court of Justice ruling enabling Spanish fishermen to sue for pounds 30m compensation from Britain.
Tory whips have told the Government that the firm promise of a referendum would help to defuse the threat of a defeat. And the party chairman is becoming exasperated because he has to write to all Tory MPs to tell them what line to adopt over challenges they have received from Sir James Goldsmith, the international financier turned MEP, who is threatening to put up independent candidates against them at the next election, unless they back a referendum.
Lord Lawson, the former Chancellor, last night called for the Cabinet to make a clear announcement now that it would allow a referendum.
Mr Major is keen to smooth over the differences without pushing Mr Clarke to use his veto in the Cabinet against a referendum. But senior ministers said last night that they were playing for very high stakes. "It has been forced back on to the agenda. It is a very live issue," said one ministerial source.
Douglas Hogg, the Minister of Agriculture, infuriated Euro-sceptic MPs with his dismissal of their demands for Britain to pull out of the European Commons Fisheries Policy. He rejected the calls as "an illusion". One senior Tory MP said: "He should not be in the Cabinet."
Sir Michael Spicer, a former minister and leading Euro-sceptic MP, has tabled a Commons motion calling on the Government to use the forthcoming inter-governmental conference to reassert the authority of Parliament over the European Court of Justice.
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