He also faces renewed embarrassment over the actions of the Oflot regulator, Peter Davis, who was yesterday under intense pressure to resign, anger over huge pensions for the heads of privatised utilities and protests by senior Tory backbenchers over the rail sell-off.
Almost a dozen rebels, formerly "whipless" MPs and those from fishing constituencies, could withdraw support in a vote tomorrow which comes ahead of expected EU-imposed cuts in British fishing quotas at a Brussels meeting on Thursday.
A number of Tory MPs are expected to air other EU grievances following the Madrid summit, with Euro-sceptics renewing calls for Mr Major to make an election manifesto commitment to rule out joining a single currency in the next parliament, but complaints of timidity by Euro-enthusiasts.
The divisions come amid expectations that Mr Major will make a firm pledge for a referendum in the event of a Cabinet decision in early 1998 to replace the pound with the newly named Euro. A Labour source suggested that that party was also inching towards the position that it would not go into the next election without promising a plebiscite.
One MP who intends to rebel, David Porter, whose Waveney constituency covers Lowestoft, said he was prepared to resign the Tory whip if there were sweeping cuts in Britain's quota. That would reduce Mr Major's official majority - discounting the other "whipless" rebel, Sir Richard Body - to three. If the Government loses the by-election caused by the death of the Staffordshire North East MP Sir David Lightbown, the official majority over all other parties would be down to one, potentially hastening the election and depriving the Government of the chance of a give-away Budget in an improved economy.
John Redwood, the former Cabinet minister and Mr Major's leadership challenger in July, drove another large hole in the Tory party's uneasy truce by launching a broadside against the pro-European Chancellor, Kenneth Clarke, for appearing to endorse plans for a single currency. Yet more cracks appeared as a seven-strong delegation of backbenchers prepared to meet Sir George Young, Secretary of State for Transport, to voice growing concerns over rail privatisation. Sir Keith Speed, the MP for Ashford, warned that the sell-off could lose the Tories the election unless the private sector were required to pledge investment in desperately needed rolling stock.
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