Clarke paves way for clash on referendum

Kenneth Clarke, the Chancellor, yesterday cleared the way to a Cabinet showdown by showing no signs of giving up his fight to stop the Government promising a referendum before Britain joins a single currency.

The Chancellor's continued stand emerged as the anti-European Union Sir James Goldsmith, whose Referendum Party is posing a threat to the Tories in marginal seats, warned that such a referendum should be on more than a single currency - and should take place before or at the time of the next general election. Sir James also announced that his party would hold a full conference in October.

Mr Clarke said in at least two broadcast interviews yesterday that "nothing had been decided" in yesterday's Cabinet discussion which injected powerful - and now probably irresistible momentum - into the campaign within Government to make an early commitment to a single currency referendum

Mr Clarke's stand - backed at present by Michael Heseltine, the Deputy Prime Minister - ensures a tough debate when the Cabinet discusses a Foreign Office paper on the mechanics of a referendum before Easter. But few ministers or senior MPs expect the pro-European Mr Clarke to seek to exercise a "veto" over the decision by threatening to resign in the face of a growing consensus in favour of pledging a referendum.

That view was underlined yesterday when Sir Norman Fowler, an influential former senior Cabinet minister and party chairman, joined the calls for a referendum promise by declaring: "I do not think it is remotely possible for the single currency issue to be settled quietly and privately inside government." Sir Norman is a close friend of both Mr Major and Mr Clarke.

The Cabinet looks increasingly likely to approve a policy - sought by a majority of centre-right MPs as well as a limited number on the pro- European left - which would oblige the Cabinet to hold a plebiscite after deciding to join a single currency. Speaking after the EU summit in Madrid in December Mr Major said that "if there were to be a referendum, the time for a referendum would be after the British Cabinet had decided that it wished to recommend going in and it would then seek an endorsement of that in a referendum."

But that still leaves open several questions - which will be addressed in the FCO paper - such as whether all ministers would have to take collective responsibility by campaigning for a single currency, and whether Parliament would be required to approve membership of the European Montetary Union before or after such a referendum.

Sir James, who announced yesterday he had recruited more than 400 candidates to fight the next election, said his party had engaged MORI to do its opinion research, and had 18,500 "active supporters throughout the country".

He said the promise of a referendum should definitely go ahead and "should allow for a full debate on the sort of Europe of which Britain wanted to be a part".