The Cabinet yesterday decided, in conditions of more than usual secrecy, to examine how it could use the 1996 negotiations on Europe's future to claw back powers from Brussels as well as halting further integration.
In a move that will be welcomed by Euro-sceptics, but may intensify alarm on the Tory pro-EU wing, an expanded meeting of the Defence and Overseas Policy Committee (OPD) agreed to consider possible means of regaining power from the European Commission and Court of Justice.
Ministers are convinced their sceptical approach to negotiations on a revision of the Maastricht treaty will help party unity and is in line with the relatively emollient line John Major has adopted towards his Euro-rebels - for whom "repatriation" of European powers is central to reform.
The decision to press ahead with an agenda for reform, already floated by the Home Secretary, Michael Howard, a leading sceptic, was taken at a two-hour OPD meeting which drew up a detailed programme of work for the 1996 Inter-Governmental Conference, tobe chaired by Douglas Hurd, the Foreign Secretary.
Amid a large IGC agenda, that will cover Common Agricultural Policy reform, the European Parliament - which the Government wants to ensure is given no further powers - common foreign and security policy and the future of qualified majority voting, a large Cabinet committee, OPD(E), will also look at ways of limiting the Commission's right to initiate legislation. One idea aired by Mr Howard is that the Commission should do so only when the Council of Ministers agrees its purpose cannot better be achieve d by national governments.
Ministers will also think how to limit the powers of the European Court. Among judgments causing Tory anger are those on equal pension age, clean water directives and, most recently, providing five-figure compensation for pregnant servicewomen.
Hopes are growing on the Tory right that Mr Major will reinforce his new year pledge to oppose a single currency in 1997 by making clear that he recognises any such move later would raise fundamental constitutional issues. Such a declaration would stop short of ruling out a single currency, which most Euro-sceptic ministers and MPs would like. But it would tell pro-European ministers such as Kenneth Clarke, the Chancellor, that the Prime Minister does not accept that the question is merely economic. Some opponents of a referendum on a single currency, including Mr Clarke, are thought to have been arguing that no constitutional issues are at stake.
Euro-sceptic ministers have also been encouraged to find that Malcolm Rifkind, the Secretary of State for Defence and a possible candidate to succeed Mr Hurd if and when he decides to leave the Cabinet, has for some time broadly opposed a single currency.
There were some right-wing fears that OPD(E) would be dominated by pro-European "big beasts" such as Mr Clarke and Mr Hurd. However, the committee's members are all ex-officio and include Michael Portillo and John Redwood, both Euro-sceptics, and David Davies, the non-Cabinet minister for Europe.
Join our new commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies