Blair has secret talks with senior Conservatives

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TONY BLAIR is holding secret talks with senior Conservatives as part of his attempt to swing British public opinion behind membership of the single European currency.

TONY BLAIR is holding secret talks with senior Conservatives as part of his attempt to swing British public opinion behind membership of the single European currency.

Michael Heseltine, former deputy prime minister, who dismissed Mr Blair's appeal for progressive Tories to join Labour as "political opportunism", met Mr Blair two weeks ago, The Independent has learnt.

Mr Blair is expected to hold talks soon with other left-wing Tories, including the former chancellor Kenneth Clarke. Gordon Brown, the Chancellor, will also be involved in the discussions, as will senior Liberal Democrats.

The discussions could undermine attempts by William Hague, the Tory leader, to attack Labour over the euro at the Tories' annual conference in Blackpool, which opens on Monday. Some activists will condemn "Tony's Tories", including Mr Heseltine and Mr Clarke, who sit on trade groups, for accepting posts on government bodies.

Mr Blair's aides said yesterday that the aim of his talks with Tories was to "co-ordinate their scripts" to ensure that pro-Europeans had a more effective strategy.

Mr Blair will stick to the Government's policy - that Britain could join only after five economic tests are met. But he is also expected to spearhead an all-party drive to spell out the benefits of a successful single currency, such as lower interest and mortgage rates, reduced business costs, and cheaper prices for consumers.

The Prime Minister will share a platform with Mr Heseltine and Mr Clarke later this month at the launch of Britain in Europe, the embryo "Yes" campaign for the single currency referendum, expected after the next general election.

As the Labour conference in Bournemouth ended yesterday, Mr Blair accepted that Mr Heseltine would "fight for a better Conservative Party" rather than join Labour. "In a sense, I wish them well in that," said Mr Blair. "Because it is important that the Conservative Party comes to its senses for the health of British politics."

In a series of television and radio interviews, Mr Blair renewed his appeal for disillusioned Tories to join New Labour. He said: "I want a real mass membership Labour Party, that reaches out to every corner of the country, and is a one-nation party that can govern in a way that brings the people of the country together."

But Mr Blair's declaration that the "class war" was over was undermined by Michael Meacher, the Environment minister, who suggested at a fringe meeting in Bournemouth that it might be necessary to stop people having second homes in rural areas to prevent house prices going out of reach of local people. Mr Blair dismissed the idea as "nonsense".

Mr Blair claimed Labour had "found its feet and its confidence" at what party strategists regard as a successful conference. Officials said Mr Blair had allayed many fears of party activists in his conference speech by promoting the goal of equality for all. "They know now he is not a Tory," said one.

The Prime Minister rebuffed cabinet ministers who are demanding a pre- election spending hike financed by the Treasury's £10bn "war chest". He said: "I don't think we are in a position yet to say that we are strong enough to spend more or to cut taxes." But he hinted that he eventually hoped to do both, saying there was "not an either-or choice" between higher spending and lower taxes.

Mr Blair said tax cuts were "important" as an incentive to work and that it would be "bizarre" to be against them in principle. His comments will alarm some ministers, trade union leaders and party activists who want any spare money put into public services.