Blair's cabinet coup against Brown clears path for an early euro poll

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Indy Politics

Tony Blair ended Gordon Brown's iron grip on the decision over whether Britain should join the single currency yesterday in a move that could pave the way for a referendum in the next two years.

The Prime Minister gave the full Cabinet a decisive say in the announcement that the Chancellor is to make on 9 June over the Government's euro policy. Although Mr Brown has already reached a "not yet" verdict on his five economic tests for entry, the Cabinet is expected to block his plan to rule out a referendum before the next election.

Mr Blair wants to keep open the door to a referendum and can now mobilise the majority of more than 2-1 in the Cabinet that shares his view. One cabinet minister told The Independent last night: "We will not rule out a referendum. I believe we will keep it alive and have another look later in the parliament. It doesn't mean there will be a referendum, but it means there could be."

Some ministers will propose that the Chancellor issues a road-map for entry, setting out hurdles such as reform of the European Central Bank and the eurozone stability-and-growth pact, and promising to call a referendum if they were cleared.

Pro-euro groups were delighted, claiming that Mr Blair had scored a tactical victory and outmanoeuvred Mr Brown. "The Treasury's veto has been ended – that is phenomenally important," one prominent figure in the "yes" campaign said.

Euro enthusiasts hope Mr Blair and his ministers will start to make a sustained case for entry after Mr Brown's announcement to test whether public hostility diminishes. If it does, they believe this will embolden Mr Blair to call a referendum in 2004 or 2005.

In a surprise move, cabinet ministers were told at their weekly meeting yesterday that they would receive copies of the Treasury's 18 technical studies on the euro – running to some 2,000 pages – to study this weekend. Mr Blair and Mr Brown will then hold joint meetings with individual ministers before an initial cabinet discussion next Thursday.

Ministers will receive the Treasury's final assessment on 26 May, at the start of the Whitsun break. A special cabinet meeting on 5 or 6 June will determine the Commons statement on government policy that Mr Brown will deliver on 9 June.

Allies of Mr Brown played down the developments, insisting he had always intended to consult the Cabinet fully. They said the prospects of a referendum had not changed. Mr Brown dismissed as "ridiculous" the idea that he had lost control of the issue.