Blairs look a gift horse in the mouth after lunch with Lionel

Joanna Lee

Paris

Europe's two newest left-wing leaders had lunch together yesterday in the village of Saint Martin d'Oydes, in the beautiful Ariege region in south-west France. Tony Blair has been on holiday there with his family and the French Prime Minister, Lionel Jospin, who was visiting his constituency of Cintegabelle, 20 miles away, drove over for lunch with his wife Sylviane.

The atmosphere was casual. Mr Blair, who has received a royal welcome here since his arrival, looked relaxed in his holiday attire of a shirt and summer trousers. Neither man wore a tie as they strolled through the village, swamped by journalists and television cameras. Most of the 200 inhabitants of the village were also there to welcome them.

The leaders had a glass of champagne with the proud and elated mayor in the village square, where the villagers presented Mr Blair's three children with a young pony called Justin.

However, the children will not be bringing the pony - of the Pyrenees Merens breed - home with them. A Downing Street spokesman said: The gift "was very much appreciated, but the Blairs will leave the horse with a local family who also have children who are able to ride it."

He was unable to say whether the animal was given to the French family to keep or for safekeeping until the Blairs are able to visit it again. It is thought the Blairs may have been concerned about finding adequate stabling for it in the Downing Street area.

As they walked back to the Blair holiday home for lunch, they discussed in French Mr Jospin's budget for 1998. Speaking to journalists, Mr Jospin commented on Mr Blair's youth, and the leaders said that Europe was on the lunch menu, "along with some relaxing chat".

Officials at Mr Jospin's office have been keen to underline the private nature of the lunch. A spokesman from the Matignon said: "We have no idea what the two men will discuss."

However relaxed the meeting was, it is the first time the two leaders have met on a one-to-one basis and both were keen to see what common ground they have, particularly on Europe.

It is likely that the French leader will have tried to gain the support of his British counterpart on jobs in Europe, which will be discussed at the EU employment summit in November. Mr Jospin lobbied for this summit at the intergovernmental conference in Amsterdam in June, emphasising the importance of a "social Europe" and rejecting an EU based solely on economic issues.

Social concerns in Europe have not dampened the French government's enthusiasm for the single currency and Mr Jospin will have been keen to find out exactly where the British stand before he meets Chancellor Helmut Kohl next week. The French Finance Minister, Dominique Strauss-Kahn, is adamant the single currency will go ahead in 1999.

The meeting was also no doubt an effort to dispel the rumours that the pair do not very often see eye to eye. Mr Jospin said: "We have different traditions, but we have common values and we are both socialists."