Cabinet split over Europe goes public

THE WAR OF WORDS: What ministers had to say this week on the subject of the European Union

Kenneth Clarke's attempt to pour oil on troubled waters appeared only to have succeeded in igniting it yesterday as his party's European wings warred openly over his words and Michael Portillo's intervention.

The Chancellor's insistence that it is "quite possible to have monetary union without political union" brought charges from Euro-sceptics that he was out of line with the Prime Minister. But the party's pro-European wing bitterly attacked Mr Portillo for retorting that the issue was constitutional, re-opening Cabinet divisions.

Peter Temple-Morris, a vice-chairman of the backbench Europe committee, said he was "surprised and amazed" that "a junior Cabinet minister" had intervened when the Cabinet had to stand together. "If the Cabinet does not get it right in general and if Mr Portillo does not keep a little more quiet in particular, then the strains on the party in Parliament and in the country are absolutely enormous." But James Cran, a leading Euro-sceptic, declared Mr Clarke to be out of line and said that the bulk of the Conservative parliamentary party would be "incandescent" about the Chancellor's speech. "The Prime Minister has recognised that a single currency means a constitutional shift from the UK to Europe, whereas the Chancellor has not accepted that. That's why we can support the Prime Minister and not the Chancellor," he added.

The right, which fundamentally distrusts Mr Clarke, was delighted, Teresa Gorman, one of the whipless MPs, accusing the Chancellor of "telling porkies". She warned that Mr Clarke should "button his lip" and "fall in behind if he wants to remain part of the team"..

But Hugh Dykes, the pro-European Harrow East MP, declared Mr Clarke's speech to be "a crucial moment in indicating that senior ministers are now at last prepared to stand up and fight hard for the real arguments for closer European union".

He and others have been alarmed at the party's accelerating drift to Euro-scepticism but see the Chancellor's speech, and Michael Heseltine's re-emergence at the weekend to restate the case for Britain being involved in the design of a single currency, as the start of a fightback by the Cabinet's pro-European wing. With the Euro-sceptics determined to hold to the opt-out, Mr Temple-Morris insisted there was a policy "from the Prime Minister down" that Britain had "a right to opt in to a single currency in 1999", and the Chancellor was "utterly right to say we should be involved in that work so that if we are going to opt in then it should be as congenial as possible".

Sir Edward Heath backed Mr Clarke's speech but warned the party was in danger of losing the next election if it went on with a continuous row about the single currency.