Major banks on his own unpopularity

However badly the beef talks go, fear of an election will soften the Eurosceptics' criticism

Tony Blair's speech today to the German equivalent of the CBI is important for reasons of both high and low politics.

First the high politics. This is to do with the promise that Blair will make today that a Labour Britain would make a "new start" in Europe. The question is whether Mr Blair can genuinely sustain a new axis between Bonn, Paris and London.

A fortnight ago, Robin Cook hinted at different priorities. He said that a Labour government might in fact emerge as natural leader of a group of governments run by its "sister" social democrat parties who were actually quite worried about the power of the Franco-German alliance. That isn't, I think, quite how Tony Blair sees it. To Blair it's almost irrelevant that Germany and France happen to be run by centre-right governments.

There will be a lot in his speech today about how Labour, though pro- European, doesn't agree with everything said in Bonn and Brussels. But his message will be that Britain, as one of the three largest countries of the EU, belongs with France and Germany as the natural leaders of Europe. That isn't to make the historic British mistake of underestimating the strength of Franco-German interdependence; it is rather to argue that the Government's sullen Euro-scepticism has created a vacuum where British influence should be.

The low politics is all about beef. Mr Blair is playing a clever game but it has so far mystified the Germans. His words today will be closely scrutinised in the light of his refusal - disappointing to many in Bonn - to condemn outright John Major's non-co-operation policy. Critics of Mr Blair, and on this issue they include his avuncular fan Lord Jenkins, believe he squandered a chance to dramatise the difference between the two main parties in Europe by attacking the Prime Minister's policy outright. For evidence they cite the opinion polls showing that non-co-operation has not improved Tory popularity.

The Labour hard cases who plan day-to-day strategy are utterly scornful of their critics. If the party had fallen into that trap, they say, the Government would have turned its hugely vulnerable strategy on beef into a first-class opportunity to bash Labour as a party incapable of standing up for Britain.

By holding its fire, the Labour leadership thinks that it has kept its options open: if John Major returns from the momentous Florence summit this Saturday with a deal which the sceptics immediately attack as a sell- out, Blair can ask, as a good European, why John Major used up what political capital he had left in Europe to come away with nothing he could not have had in the first place. Sooner or later the Government could be facing a Commons division in which the Eurosceptics threaten to vote with Labour all over again.

All this may not be great statesmanship; but it is certainly worrying a few ministers. And they will be even more alarmed when they hear Blair say ominously today in Germany that it will seem odd if Major returns from Florence with a deal which doesn't contain any dates for when the ban will be lifted or details of EU compensation for British farmers.

When Malcolm Rifkind first thought up the idea of non-co-operation, it looked to several senior ministers with Eurosceptic leanings as the ideal each-way bet. If Major failed to score a stunning victory, there was the enticing prospect of a protracted war and a beef election. That view has changed. The main players now want out at almost any price that falls short of humiliation. And for all the perils of the next few days, and an acknowledgement that the negotiations will probably get worse before they get better, officials are crossing their fingers and professing cautious optimism that a deal with be struck.

The problem then will be selling it. And here Labour may have a crucial role, if only in forcing John Major to have the kind of showdown with the Eurosceptics he has mostly avoided since the one over the Maastricht bill in 1994.

The Eurosceptics are always game for battle. Kenneth Clarke was right to warn John Major that promising a referendum on a single currency would only whet the hardline sceptics' appetite for more. They have used the beef crisis as the excuse to contemplate withdrawal. Their demands for a referendum on Maastricht and pressure to roll back the encroachment of European law all testify to their tenacity.

There are plenty of opportunities for the Eurosceptics to make trouble. It has not been lost on them that each cattle-culling step laid down in the deal will need secondary legislation in Parliament. But to endanger the Government, they will need Labour's support, which in the end may not be forthcoming. Labour could yet shrink from undermining a deal to which Chancellor Kohl, Jacques Chirac and the others have agreed.

But if Labour does push the Government to the brink, the Prime Minister has a bold card to play. He can challenge the Eurosceptics with a harsh political reality: do they really want an election when their party is running 25 points behind in the polls? By publicly confronting them with that question Mr Major may not eliminate the long-term damage of the beef crisis. But he calls their bluff. It is a paradox, and testament to the strangeness of the times, that the Government's unprecedented unpopularity may be Major's strongest card in the decisive battle ahead.