Fresh doubt last night loomed over the Government's ability to last a full term after it suffered the humiliation of a Commons defeat by 299- 297 votes over fishery quotas.
The vote is a severe embarrassment for the Prime Minister, John Major, at a time when he might legitimately hope to have united his party before a general election in 1996 or, if it lasts that long, in 1997.
The Government was defeated by a wafer-thin majority despite a strong appeal from Michael Forsyth, the Scottish Secretary, to Tory Euro-rebels not to "compromise" by lining up with Labour.
The vote is unlikely to make a lasting impact on Government policy in relation to fish conservation issues. Douglas Hogg, the Minister of Agriculture, said last night only that the Government would "give due weight" to the vote when his fisheries minister, Tony Baldry, negotiates quotas at a ministerial meeting tomorrow.
But the failure to secure a Commons majority on the eve of the Christmas recess on a technical motion throws a question mark over its ability to contain its Euro-rebels between now and the final election deadline of early May 1997.
Although Labour leaders made it clear they did not intend to exploit the defeat, and by implication reunite the Tory party, by putting down a confidence motion, Tony Blair, the Labour leader, said last night: "The Government is unravelling. It is unable to lead. It is increasingly unable to represent Britain."
The vote came after an acrimonious debate over European Commission proposals to be discussed by European fishing ministers in Brussels tomorrow, which would mean significant cuts in fishing quotas next year.
In an attempt to stave off the rebellion, Mr Baldry announced during the debate the restoration of pounds 4m a year in grants to fishing ports and a Spanish agreement to a pounds 100,000 compensation payment to British fishermen for Spanish incursions into British waters.
Bitter divisions between pro-Europeans and Euro-sceptics in the party were exposed after John Townend, the Thatcherite MP for Bridlington, said the Government could not be blamed for the betrayal of the fishing industry by Sir Edward Heath. Sir Edward retorted that Mr Townend should be "ashamed" of "degrading" himself by his abusive remarks.
A bizarre aspect of the Tory rebellion was that it included not only William Cash, a hard-line Euro-sceptic, but also Hugh Dykes, a pro-European MP who abstained because Mr Major had not been sufficiently enthusiastic about the single currency at last weekend's summit.
But Mr Dykes was an exception. The rebellion was a classic revolt by hard-line anti-Europeans. Their mood had hardened over the previous 24 hours, and reflected anger over the confirmation of a timetable and name for the single currency at the Madrid summit.
Despite Britain's having the right to opt-out from the single currency, Euro-sceptics are dismayed by Mr Major's refusal to rule out British membership of monetary union in the next Parliament.
Last night's vote came after the Government had faced opposition within its own ranks to proposed fishery quotas from two sections of the party: MPs with coastal constituencies perturbed at new quotas and Euro-sceptics seeking withdrawal from the European Common Fisheries Policy.
The proposed cuts in quotas will mean a 30-per-cent reduction in herring, mackerel, and plaice catches. Although cod, haddock and saithe quotas will remain stable, the Government acknowledges there will be a "significant cut" in North Sea whiting catches. The Government underlined how keen it had been to avoid defeat by announcing a reprieve of pounds 12m in harbour, marketing and processing grants over three years, which had been cut in the most recent public-spending round.
Both main parties made strenuous efforts to maximise their votes by bringing back MPs from abroad - and appealing to ill MPs to come to the House.
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