Major pledges EU money referendum

DONALD MACINTYRE AND COLIN BROWN

A promise that a Tory government would only enter a single currency following a referendum is now in prospect within weeks.

This emerged yesterday after John Major ordered the Cabinet to finally resolve a split over a referendum, to defuse a new spate of Euro-sceptic unrest.

Mr Major revealed in the Commons yesterday that ministers were "considering the circumstances in which a referendum may be appropriate." His disclosure came as the Government decided to avoid a full dress vote on next week's White Paper on the Inter-Governmental Conference on the future of the European Union.

Instead business managers are resorting, for the first time since 1979, to ordering a light, one-line whip, to avoid the embarrassment of being defeated on a full turn-out.

Senior Conservative MPs last night predicted the Government would defuse Tory backbench unrest with a commit- ment before Easter to a referendum on the single currency.

Kenneth Clarke, the Chancellor, however, has been holding out against any commitment to a referendum. Mr Major has not yet won him over, but was said to be preparing further Cabinet pressure to overcome his opposition. Mr Clarke has the strong backing of Michael Heseltine.

Up to now Michael Portillo, the Euro-sceptic Defence Secretary, has also been against a promise to hold a referendum, on the grounds that it might encourage the idea that a future Cabinet will decide in favour of a single currency. But he is thought likely to bow to pressure to fall into line.

There are also ministerial expectations that Mr Clarke will not exercise a"veto", by threatening to resign. "Ken will respect Cabinet collective responsibility," a colleague said.

In a move which Tory MPs believed was stage-managed, Mr Major faced a call by Sir Marcus Fox, chairman of the 1922 Committee of Tory MPs, for a referendum at Prime Minister's Questions.

Mr Major said: "I have made it clear to the House on previous occasions that I believe a referendum on joining a single currency could be a necessary step. My position hasn't changed.

Recent opinion polls have shown a two-to-one majority against a single currency. The most recent, an NOP poll for the Sunday Times in December, showed 60 per cent opposed to monetary union, 24 per cent in favour, and 17 per cent undecided. That could change, however, if the Cabinet, backed by Opposition leaders, recommended a single currency.

A senior Cabinet source said no decision had been reached as yet, but ministers believe Mr Major, who saw Mr Clarke privately on Wednesday, is trying to win over the Chancellor in order to be able to give a clear commitment to a referendum.

The Chancellor, however, was sticking to the Government's old formula that a referendum would be considered only if and when the Government proposed joining a single currency.

"I am not a federalist. I believe in a unit of nation states. Let's decide whether ... to go in or not when we see what the animal looks like," he said.

Mr Clarke steadfastly declined to endorse Euro-sceptic demands for a referendum.

"Let's bring that judgment to the single currency if and when it happens," he said.