Malcolm Rifkind, the Foreign Secretary, yesterday dismissed the prospect of Kenneth Clarke resigning from the Cabinet amid intensive behind-the- scenes efforts to reach a deal ensuring that the Chancellor finally agrees to a referendum on the single currency.
Mr Rifkind insisted there was not "the slightest possibility" that the Government would lose Mr Clarke over the issue, and he predicted the Cabinet would reach agreement this week when it debates the paper he is producing on a referendum pledge.
After clear signs that John Major is now determined to promise that a Tory government would not lead Britain into a single currency without a referendum, strongly based reports that Mr Clarke, who is currently on a working trip to southern Africa, could push his opposition to a referendum to resignation last week, sent tremors through Whitehall.
But some of Mr Clarke's senior ministerial colleagues are hoping that the terms of the pledge - and in particular a promise that dissident Euro- sceptic Cabinet members would have to campaign for a single currency in such circumstances or resign - will pull a reluctant Mr Clarke back from the brink.
Such a promise could be balanced by a renewed pledge from Mr Major that he will not seek to rule out future membership of the single currency in the Tory election manifesto.
And in another move, which will be construed as a possible further concession to the pro-Europeans, Mr Rifkind provoked a backlash of Eurosceptic criticism by hinting at the possibility yesterday that a referendum might not necessarily be binding on the Government.
Although it is not certain that such concessions would be enough to pacify Mr Clarke, Mr Rifkind's paper is expected to recommend that in the event of a Tory Cabinet decision to join a single currency after the election, Mr Major would not allow ministers the freedom to campaign according to their consciences.
This could itself provoke a fierce tussle at the Cabinet since Eurosceptic ministers such as Michael Portillo, the Secretary of State for Defence, could be forced to risk their political careers by campaigning against a single currency. Mr Portillo is also strongly opposed to a referendum pledge but has indicated that as a "team player" he will abide by a Cabinet decision to promise a referendum.
The Foreign Secretary said yesterday on LWT's Jonathan Dimbleby programme that the referendum proposal would be resolved after a Cabinet discussion of all the issues.
He also indicated his paper would look at a "lot of related issues" as well as the actual question of whether to make the referendum pledge binding or advisory.
In an immediate reaction to the suggestion that it might not be binding, the leading Euro-rebel Bill Cash asked: "What is the point of having a referendum unless the Government is going to accept it?"
And John Townend, chairman of the right-wing 92 Group, said he was "surprised" that Mr Rifkind had even mentioned a advisory referendum. He added: "There is no point in having a referendum and not abiding by it." In practice most politicians believe that even an advisory referendum would be morally binding.
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