Rebels woo Tory left to oust Major

REBEL Conservative Eurosceptics are seeking support from Tory left-wingers to build cross-party support for a leadership challenge to John Major this week. Talks are taking place this weekend aimed at drawing into play Norman Lamont, the disgruntled ex-chancellor, as a stalking horse candidate.

Tory right-wingers have told their parliamentary colleagues that there are too few of them to force a contest without wider backing from the disgruntled left.

The move presents a dilemma for supporters of Michael Heseltine, President of the Board of Trade, who could stand to gain if Mr Major was toppled following a strong vote for a stalking horse. Right-wingers have hinted that they would prefer Mr Heseltine as Prime Minister to the present malaise.

One right-winger said the left had to ''decide whether or not they want Mr Heseltine to be prime minister''. Soundings on the left will also take place over the weekend.

However, Heseltine supporters are said to be cautious - particularly since any public indication that they are involved in a plot to destabilise the Prime Minister would undermine their candidate's prospects. Left-wingers are also unhappy with the choice as stalking horse of Norman Lamont, who has emerged as hostile to Europe and hardline on Northern Ireland. The deadline for the 34 MPs needed to mount a challenge expires on Wednesday.

A loyal minister argued: ''All this talk of leadership is absolute nonsense. The rebels know perfectly well that the only alternative leaders are Heseltine or Clarke, both of whom are substantially more Euro-friendly than the PM.''

Meanwhile the Chancellor, Kenneth Clarke, is defying pleas from at least two Cabinet ministers, and pressure from John Major, to scrap plans for doubling the rate of VAT on domestic fuel in Tuesday's Budget. Both Ian Lang, Secretary of State for Scotland and Jeremy Hanley, party chairman, have lobbied to scrap the second tranche of the two-stage 17.5 per cent VAT levy.

It has also emerged that Mr Major canvassed the possibility of stopping the 9.5 per cent rise due in April 1995, during Budget discussions. Ministers are worried that the second tax rise will destroy Tory hopes in next spring's local elections - particularly in Scotland.

Labour has used a procedural device to try to expose the VAT rise to a Commons vote a week on Tuesday. Some fear that would automatically trigger a second confidence vote within a week. A government's Finance Bill is by constitutional convention a measure of confidence.

However the Chancellor and his allies argue that to abandon their legislative commitment would show weak leadership and blow a hole in Budget arithmetic.

With government business managers now more anxious about the VAT revolt than the rebellion over Europe, some ministers are pressing for an enhanced compensation package for pensioners and the poor. They believe concessions will be made if the parliamentary arithmetic looks unfavourable.

Even the most hardened Eurosceptics accept that, having made tomorrow night's vote an issue of confidence, the Government will get its way over higher EU contributions. Sir George Gardiner said: ''The Cabinet will win its vote on Monday but in the process has made itself the laughing stock of the British people.''

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