Britain faces veto clash with Brussels

Britain faces new conflict with Brussels following proposals published yesterday to abolish use of the veto in 25 new policy areas. Among areas where unanimity could be abolished are culture, industry and the environment, says a draft proposal on European Union reform published yesterday by the Netherlands, which holds the presidency.

It also sets out the first detailed plans for building a hard-core Europe, using "flexibility". It suggests the veto may not be maintained for "flexibility", which means Britain could lose the power to stop other countries speeding ahead.

Two options are set out under which hard-core countries could proceed after agreement by qualified majority. Only one option is presented for voting by unanimity. The document confirms British fears that other states are determined to find ways of speeding integration without being held back by objectors. It will form the basis of tough negotiating before final decisions at the European summit in Amsterdam in June.

Under one option, fast-track power-sharing could be applied to several core areas of policy-making, listed as economic and monetary union, including indirect taxation; environmental standards; health and safety of workers and areas of immigration and justice policy.

Applying flexibility to EMU is important to several member-states keen to ensure countries which join the single currency should have the power to use fast-track decisions, to speed future economic integration. Several member-states envisage a need for greater harmonisation of tax and social security once the single currency is running.

The last chance they have to secure a treaty change, creating this power, before the launch of monetary union will be in June. In perhaps their most ground-breaking initiative, the Dutch supported the drive for speedier integration within the Euro-zone. They insisted the veto would, in general, never be lifted for policy-making on direct taxation, regional funding and constitutional matters.

The European Commission has been reluctant to accept application of flexibility to areas in the "first pillar" of EU decision making, which includes EMU, for fear the entire union would fragment as a result.

However, it is clear the phrasing in the Dutch document is broad enough to allow countries to adopt fast-track "flexible" decision-making in any areas of EMU policy-making they choose, including direct tax and social security.

John Major has insisted Britain would not give up the veto in any new policy areas and Tony Blair has said Labour would accept an extension of qualified majority voting (QMV) to limited areas, citing industry, research, social policy and environment. Several of the 25 areas listed in the Dutch document as a "working basis" for extension of QMV are highly technical, such as development of research and training, and laws governing professions.

Mr Major has favoured flexibility in principle but insisted Britain should have the right to veto any decision by core groups of countries to move ahead alone.

r Strasbourg - The European Commission president, Jacques Santer, fighting to avoid censure for the way it handled the "mad-cow crisis, offered the European Parliament the right of veto over EU health policy, Reuter reports.