Hurd backs EMU referendum

The prospect of a Tory manifesto pledge to hold a referendum on joining a single currency drew closer yesterday as the idea received firm support from Douglas Hurd, one of John Major's closest Cabinet allies.

"I do see arguments for a referendum on this subject if the British Government came to the conclusion that a single currency was in the national interest ... there is a case for it," the Foreign Secretary said.

He added in evidence to the Commons Foreign Affairs Select Committee, repeating the point later in yesterday's Commons European Union debate: "The Prime Minister has made it clear in several public statements that he doesn't rule that out."

Mr Hurd said the arguments for and against a referendum cut across the arguments for and against a single currency. A Foreign Office source emphasised that the issue was ultimately one for the Prime Minister. But Mr Hurd's statement comes amid mounting expectation that Mr Major will promise a referendum, possibly at this autumn's party conference - and that the pledge will be incorporated into the manifesto for the next election.

Mr Hurd went out of his way to deny a newspaper report that he had told a private backbench committee on Tuesday night that "the Prime Minister thinks a referendum would please almost everyone in the party and the country", insisting he "did not put words into the Prime Minister's mouth".

But the Foreign Secretary will play a key role in drawing up the sections of the manifesto dealing with Europe.

A referendum pledge could help Mr Major unite his fractious party to the extent of seeing off an autumn leadership challenge, and would please many on the Tory right. But Mr Hurd signalled a fresh determination not to give in to right-wing demands for Mr Major to rule out joining a single currency in the lifetime of the next Parliament.

Addressing the committee in advance of the twice-yearly EU summit in Cannes on Monday, Mr Hurd called Britain's opt-out a "remarkedly advantageous" negotiating position: "A position in which we do have a say in the preparations but are not committed to the outcome, seems to me to be an admirable position."