Sir James in election promise to Tory MPs

Sir Teddy Taylor and leading Euro-sceptic Tory MPs have privately won assurances that they will not be challenged at the general election by candidates from Sir James Goldsmith's Referendum Party.

The informal deal, agreed in correspondence, will reopen the demands for the Tory party to do a deal over a referendum in spite of efforts by John Major to rule it out.

John Redwood, the champion of the Euro-sceptic right, who met Sir James on Wednesday, is seeking a compromise with Sir James by pressing the Government to make a commitment to renegotiate the Treaty of Rome, underpinning the European Union, as part of its demands for reform of the common fisheries policy, action against the ban on beef exports, and the European Court of Justice.

Kenneth Clarke, the Chancellor, yesterday threw his weight behind the Prime Minister's rejection of overtures to Sir James, and attacked Fleet Street editors as "way out Euro-sceptics" for a campaign of criticism of the Government's "drift" on European policy. The Chancellor warned MPs and editors they were playing a "dangerous" game by courting the financier's opinions.

Mr Clarke said Sir James had "maverick" views on crucial issues such as trade, and derided the demand for a Euro poll. "Common sense is that it is in our economic and political interest to be one of the great European powers," Mr Clarke said on BBC radio.

The Chancellor also rejected growing Euro-sceptic pressure for a commitment to renegotiate the Treaty of Rome. "Some of them openly talk about amending the Treaty of Rome . . . and about entering into relationships with Europe which no-one else would agree with for the very simple reason that they would not work."

The unrest over Europe continued yesterday as Euro-sceptic Tory MPs privately criticised Mr Major's speech to the Institute of Directors which attacked Sir James, without naming him, as living in "cloud cuckoo land" by calling for a referendum on Britain's withdrawal from the EU.

About 30 Tory Euro-sceptics who saw the Chief Whip, Sir Alistair Goodlad, on Tuesday, criticised the apparent vaccilation of the Government over Europe and the failure to take tougher action against the ban on exports of British beef.