The admission from some of Mr Major's supporters that there are circumstances in which he would step down voluntarily represents a marked change of tone - contradicting other assurances that Mr Major will brazen out even a catastrophic result. To get fewer than 10 seats in the elections to the European Parliament on 9 June, the Tories would need to do even worse than in last Thursday's local elections. But the leading poll analyst John Curtice, lecturer in politics at Strathclyde University, said last night that this was 'not beyond the bounds of probability'.
Projections from last week's vote suggest that the number of Tory seats at Strasbourg will fall from 32 to 14, when the Liberal Democrats' good performance in the south is taken into account. A fall to fewer than 10 seats, which would require the loss of about 2 per cent more to the Liberal Democrats would, it is argued, create Tory panic.
The referendum idea is part of a 'peace package' agreed by MPs from both wings of the Tory party, which was put to the Foreign Secretary, Douglas Hurd, at a private meeting held at Westminster two weeks ago.
'The Foreign Secretary said it was an interesting idea, that he would refer it to the Prime Minister,' said one of the MPs at the meeting.
The promise of a popular vote - either on the outcome of the next Inter-Govermental Conference in 1996 or on the future of the European single currency - could unite opposing factions of the Conservative party. It could allow Mr Major to rescue his leadership, which many Tory MPs think is doomed, and to regain the political initiative from the opposition parties. A similar idea enabled Harold Wilson to secure Labour unity on Europe and led to Britain's first national referendum in 1975.
Sir Teddy Taylor, MP for Southend, one of the fiercest critics of the European Union, yesterday called for a referendum on the 1996 conference and was backed by Peter Temple-Morris, MP for Leominster, a Europhile. Mr Temple-Morris was a leading supporter of Michael Heseltine in 1990. Some MPs saw his agreement with Sir Teddy as a hint that Mr Heseltine might offer a referendum as a sop to the right, should he contest the leadership. That might encourage Mr Major might try to get in first.
Sir Teddy last night predicted a Government announcement 'quite soon', adding: 'I think you will find that the Government says it is considering the issue, and gradually it will step into policy. We have to do something. The party is in a desperate state.'
Ministers were yesterday cautious about the prospects of putting complex issues involved in a European treaty to a referendum. Opponents of the idea said that Mr Hurd had been careful not to endorse the suggestion. But Mr Temple-Morris estimated the chances of securing a referendum as '50-50 at the moment and notching up all the time'. He said he had discussed the idea with three leading Eurosceptics last week.
There was more evidence of Tory divisions as former prime minister Sir Edward Heath called for an extensive Cabinet reshuffle, endorsed European monetary union and said that the Government's handling of the EU voting rights row was 'absolutely unforgivable'.
Michael Brown, MP for Brigg and Cleethorpes, resigned as a Government whip last night following a report about his alleged sexual conduct in today's News of the World. Mr Brown, 42, said he was resigning 'with a view to instituting proceedings . . . this will require my personal and direct attention which I could not pursue as long as I remained a member of the Government.'
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