Major keeps referendum options open

John Major yesterday made it clear that he was not planning a referendum on Britain's future in the European Union in advance of the 1996 Inter-Governmental Conference on Europe - while continuing to keep open the prospect of holding one in the l onger term.

His latest remarks on the issue still consuming Tory backbenchers came after Sir Edward Heath, the former Prime Minister, delivered a scathing warning to him that if he had warmed to a referendum in order to appease Euro-rebel MPs his move "would fail completely and is therefore mistaken''.

It came amid some signs of disarray within Labour's ranks in the House of Lords after Lord Peston, a front-bench trade and industry spokesman, stated that "some of us'' regard a single currency as "absolutely essential to the future of the [EU]''.

The Prime Minister's coolness on the idea of a pre-IGC referendum, which was not unexpected, came in response to a carefully worded question from the pro-European ex-minister Tim Yeo, who backed the general idea of a referendum by saying that "the results of last four general elections show that the good sense of the British people can normally be relied on''.

Mr Yeo suggested that if the IGC was to produce "substantial changes in the EU, that the use of referendum might then be justified''. But it was "extremely difficult in advance of the IGC to know precisely what the question might be in a referendum''.

In what was read by some MPs as an attempt to contain speculation on a referendum, Mr Major replied that while he was "not prepared to close the door'' to one there were "very important constitional matters to be considered and it would be very unwise atto how to deal with that matter''.

Earlier, Sir Edward told BBC Radio 4' Today programme that one reason why the public had warmed to the idea of a referendum was that it "lost confidence in Parliament and the Government''.

There was mild irritation among the Labour leadership that Lord Peston had chosen to make such a strong statement in favour of a single currency, though it was emphasised on behalf of Tony Blair, the party leader, that Labour policy was to favour the principle of a single currency but that it had to be preceded by financial and economic convergence by the countries taking part.