Plebiscite may rescue Major

PATRICIA WYNN DAVIES

and JOHN RENTOUL

The risk of an autumn leadership challenge to John Major deepened yesterday as right-wingers demanded he rule out all prospect of joining a European single currency in 1999.

The call came amid increasing Westminster speculation that the Prime Minister might give ground over holding a referendum on the issue, in response to his growing band of critics.

A group of senior Tory Euro-sceptics are spearheading a "stop Michael Heseltine" campaign - with media appearances over the weekend and yesterday by leading members Sir Nicholas Bonsor and Sir Archie Hamilton. But Whitehall sources emphasised that Mr Major would not be able to deliver on the single currency demand without the resignation of Kenneth Clarke, the Chancellor, and without blighting future relations and negotiations with Britain's EU partners in next year's inter-governmental conference on the future of Europe.

The only immediate solace for the Prime Minister appeared to come from a distinct growth of support by pro-European Conservatives for a referendum on the currency as a way of healing the party's divisions.

Launching a pro-EU document with a foreword by Mr Major, Ray Whitney, chairman of the Positive European group of Tory MPs, said he would accept a referendum, while Sir Norman Fowler, the former party chairman, repeated his support, saying he thought opinion among Tory MPs was moving in his direction.

Such a trend is at odds with Mr Clarke's thinking, and he repeated on yesterday's BBC Radio 4's Today programme: "I personally prefer parliamentary democracy, as is well known." Two Cabinet right-wingers, John Redwood, Secretary of State for Wales, and Michael Portillo, Secretary of State for Employment, are also opposed, along with Mr Heseltine, President of the Board of Trade.

But there were private suggestions yesterday that the Prime Minister might make a firm promise of a plebiscite - possibly announcing it at this autumn's party conference - significantly building on his statement on 24 February that "I have never ruled out a referendum and again, on this occasion, I do not rule out a referendum..."

Many MPs believe Mr Major's performance at the Blackpool conference could be crucial to his survival the following month. Yesterday, as speculation over a "stalking horse" challenge heightened, he was given a lukewarm reception by Tory backbenchers as he rose for the Commons statement on the G7 summit.

"Stop Heseltine" campaigner Sir Archie pressed home his message in a BBC radio interview, insisting that "Michael Heseltine is the only person who is placed to win a leadership contest if John Major was to resign. That would make the Conservative Party's problems worse, not better."

Some right-wingers would rather the Tories lost the election under Mr Major, whom Mr Portillo, their favoured candidate, could succeed. But Mr Heseltine's stock still appears to be rising. One source insisted that the arguments about monetary union did not apply to Mr Heseltine in the same way in the eyes of a disaffected party worried about a disaffected electorate. "A lot of MPs think that the only way to avoid meltdown at the next election is to have Heseltine in charge."

he said.