"That means they will go into the next election asking people to vote for a holiday-free Britain," a senior Labour source told The Independent last night.
Under the terms of the Working Time Directive, all workers would have automatic entitlement to three weeks' annual paid holiday. Labour estimates that nearly 2.5 million British employees - 12 per cent of the workforce - get no paid holiday leave.
"Britain is the only country in the European Union where employees have no legal right to paid holiday," a Labour spokesman said.
The Government has decided to implement the directive almost immediately and then, if re-elected next year, will try to change the governing European Treaty, .
In a speech to the Lord Mayor's banquet, at the Guildhall, the Prime Minister last night repeated that the Government would threaten to veto any further European Treaty unless it included guaranteed cover for a British opt-out from employment legislation like the directive
A government source said later that Mr Major did not want the Working Time Directive to apply to Britain; any treaty change would have to be retrospective and allow British exemption from the provisions of the directive.
This means that if the European Court upholds the directive today, as expected, mini- sters will implement it as soon as possible. Mr Major will then seek its revocation in a new treaty that is due to be concluded in Amsterdam next June - if he is re-elected in an expected May election.
In his Guildhall speech, the Prime Minister said the Government would continue to resist proposals that would damage British competitiveness, costing the country markets and losing jobs.
"That is why the Working Time Directive, on which a European Court judgment is expected tomorrow, represents an important point of principle.
"We are in favour of good working conditions in this country. They are very important.
"But the basic employee protections are long-established in common law. There's no case for extra prescriptive legislation from Europe - imposed by qualified majority voting against British objections - on matters that are now best resolved between employer and employee.
"That is why, if the court rules against us, we will require changes in European law to reinforce Britain's protection from such legislation. Our partners know that. And they know that we shall insist upon these changes before they can conclude any new agreements at the Inter-Governmental Conference next year."
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