There is an easy way to win the debate over Europe - but it requires courage

Mr Blair should hold on the same day a referendum on the euro and the new constitution. With one bound he would be free
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It has not taken long for the ministerial barricades to start tottering. For less than two weeks the right-wing newspapers have mounted a predictably relentless assault, demanding a referendum on the revised constitution for the European Union. Already ministers are getting into a sweaty panic, contradicting each other, uncertain of how to respond to the onslaught.

Sometimes in this supposedly mighty Government ministers panic without good reason. A newspaper headline can cause internal chaos even if it is not based on the truth. This is different. Ministers have good cause to be in a tizzy. Their position is not sustainable and they know it.

There is no logic in offering a referendum on Britain's membership of the euro, while excluding voters from having a say on the revised constitution. The Convention on the Future of Europe is not a mere "tidying-up exercise" as Peter Hain suggested. That comment was one of several that I suspect the normally deft Welsh Secretary regrets making. The fact that his deftness has deserted him on this issue is a symptom of the unease in ministerial circles. Mr Hain and others recognise significant changes to the European Union when they see them. Adding an extra 10 countries to the existing 15, appointing a presidential figurehead and extending qualified majority voting are measures in themselves that amount to a lot more than a bit of tidying up.

I am against referendums. They are devices deployed by political leaders to cover up splits or to avoid taking a lead on issues ("Our policy on the euro is very clear: we are committed to holding a referendum"). Still we are where we are. The Government has offered referendums on matters of much less significance than the constitution of Europe, too cautious to take a firm view itself on matters such as mayors and regional assemblies.

As far as Europe is concerned it is in the awkward position of having chosen the wrong subject on which to hold a referendum. A campaign on the euro will always be potentially hazardous whenever it is held. A rogue poll, a word out of place by a leader in Britain, or in the eurozone, could send the pound soaring and the euro slumping, or the other way around, influencing the outcome of the referendum. As Ken Clarke observed on the BBC the other day it was always "quixotic" to propose a referendum on the way a country manages its exchange rates. In contrast the proposals for the EU constitution, once resolved, will be clear and far less vulnerable to unpredictable events. No wonder several other countries will be holding referendums on the Convention when most of them did not offer a separate vote on membership of the euro.

Still there is no way the Government can renege on its commitment to hold a euro referendum. So I have a proposal, a way through that could transform the current nervy situation into an unequivocal ministerial triumph. Tony Blair should hold on the same day a referendum on the euro AND the revised constitution. With a single bound he would be free of his European nightmare. The ballot paper would take the form of two questions:

Do you support the revised constitution for the European Union?

Do you support Britain's membership of the euro?

Britain would have its Europe Day when the country could decide whether it wanted to be part of the European project or pull out. Blair and most charismatic political leaders would campaign for a Yes/Yes vote. Iain Duncan Smith and Bill Cash would no doubt offer their services to the No/No campaign.

A Europe Day referendum would both broaden the nature of the debate and clarify what is at stake. Britain would be deciding whether to be in or out of the European Union. Blair has tried to apply this argument to the single currency. Often he has said: "The difference between us and the Conservatives is that they want to leave the EU." The argument does not work in relation to the euro; we are outside the euro and still, more or less, an active member of the EU.

But there is no question that a double "No" vote would mean the end of Britain's membership. How could it mean anything else when a country rejects so emphatically the direction in which the rest of Europe is travelling?

One of the many problems with a referendum on the euro alone is that the issues are narrow and complex. Exchange rates, the stability pact and the workings of the European Central Bank are important but they would not feature greatly in a referendum campaign. On both sides the issues would be reduced to exaggerated claims about the economic and political consequences of joining. If the second question on the constitution is added, the debate becomes truly messianic in tone and substance. We move from stability pacts to the role of Britain in the world. Who better to lead such a debate than Tony Blair, who would have the chance to redeem himself after his messianic claims about the weapons of mass destruction in Iraq?

In my view the vote on the constitution would be easy to win. Once the final draft has been agreed some of the proposals currently screaming across the front pages of the newspapers would no longer be there. What's more, the context of these changes - enlargement - should enjoy broad appeal in the UK. To the east, countries are queuing up to join the EU. Why would Britain want to leave? Most voters, travelling around Europe more frequently these days, witnessing the incomparably better public services, will choose to stay in the enlarged EU. And once they have voted Yes to the new constitution there is a logic to giving their backing to the euro, enabling Britain to become more of a player in Europe's fairly rosy economic future. With a much broader campaign there is no reason why the verdict on the euro should be linked to a specific entry date. Instead ministers would have some flexibility on precisely when Britain joined once the campaign had been won.

By posing the two questions Blair would force Britain's Eurosceptics to face the logic of their position: by choosing to scream from the sidelines they are inevitably screaming for withdrawal from Europe. This would be a campaign that decided Britain's destiny and the related fate of the Eurosceptic newspapers. Even Rupert Murdoch would have to consider his position in the light of a Yes/Yes vote.

If there is a No/No vote it would probably be the rest of Europe that raised a glass, ridding itself of this confused island with its delusions of grandeur. But I do not believe that would be the outcome. When faced with reality,Britain would reaffirm its place in Europe as it did so overwhelmingly in the 1975 referendum. Let's be bold. Blair should call a Europe Day referendum and end once and for all the narrow-minded parochialism that has deformed Britain and split its political parties for more than three decades.