The financial markets fear French rejection of the treaty in next month's referendum would put the ERM under severe strain. This could threaten a wave of interest rate increases across Europe, a realignment of currencies within the system, or even the ERM's collapse.
Sterling dropped to within a pfennig of its permitted ERM floor during the day, leading some City analysts to predict the Government may have to raise interest rates this week to prop it up.
The fear of higher European interest rates if progress towards a single currency is derailed saw heavy losses on the British, German and French stock markets. The FTSE index of 100 leading London shares closed 30.1 points lower at 2,281, which is a new 18-month low.
The pound gained a brief respite during the afternoon from two other French surveys showing small majorities in favour of Maastricht, but closed at DM2.7884, more than a pfennig down on the day.
The first line of defence for sterling is for the Bank of England to buy pounds with reserves of gold and foreign currency and force up the price, a tactic that has been used sparingly. There is speculation the Bank might buy more aggressively today to try to inflict losses on currency dealers gambling it has further to fall.
The money markets are already assuming the Bank will raise base rates by almost a full percentage point from 10 per cent. This would almost certainly bring a wave of mortgage increases and could push the economy deeper into recession.
The Treasury was at pains to emphasise that it would take whatever action necessary to maintain the pound's position in the ERM, whatever the outcome of the French referendum on 20 September.
The stock market's low-point was reached soon after the release of the poll by the BVA organisation, which showed a 51 to 49 per cent majority against the treaty. This is within the margin of error, but two other polls also indicated a shift of voters against European union.
An IFOP poll for L'Express tomorrow, and a survey by the Louis Harris organisation to be published in the magazine VSD, showed that of those who expressed a preference, 51 and 52 per cent would vote 'yes' and 49 and 48 per cent 'no'.
The polls showed that there is still a large uncommitted vote - 15 per cent according to BVA, 21 per cent, says IFOP, and 36 per cent, says Louis Harris. The fight for this block will form the battleground of the next four weeks. Of those who said they were certain to vote and expressed a preference, 64 per cent said they might change their mind.
A 'yes vote' campaign grouping 300 French celebrities was launched yesterday, uniting the film stars Alain Delon, Gerard Depardieu and Catherine Deneuve with members of the French Academy and Nobel Prize-winners.
But the surveys showed the scale of the task confronting the government. According to BVA, support has slipped among members of Francois Mitterrand's ruling Socialist party, with confirmed yes votes falling from 95 to 84 per cent. In the centre-right UDF, the 'no' vote has risen to 46 from 37 per cent. Among those expressing a preference, but with no party allegiance, opposition rose to 70 from 47 per cent.
The government has made a tactical error in leaving it so late before launching its campaign. The anti-Maastricht camp has been active virtually since the referendum was called in June.
Treaty opposition has been fed by unhappiness over the Mitterrand administration. Twenty per cent of those BVA questioned said their opinion of the President would determine their choice.
Jacques Delors, President of the European Commission, professed to be unconcerned. 'I have no worries,' he told Radio Luxemburg. 'I know the French pull themselves together on big occasions.' But privately, Commission officials are desperately worried that the treaty will be rejected, which would, in effect, bury it.Reuse content