Major's attempt at peace collapses

The Prime Minister's attempt to halt attacks on the Chancellor collapsed yesterday as one of his closest supporters warned that the Euro- sceptic right wing were already fighting the battle for the leadership.

Robert Hughes, a member of the Prime Minister's leadership election campaign team, said the left-right split over Europe which had undermined Kenneth Clarke's authority had become part of the battle for the succession after the election.

Mr Hughes, Tory MP for Harrow, said on BBC radio: "Too many people on both sides of this argument [Europe] aren't concentrating on this; they are not concentrating on the election; they are simply positioning themselves for what is going to happen after the election, win or lose."

The admission that the campaigning had already begun for John Major's leadership crown highlighted the feeling by many Tory MPs that the divisions over Europe are too deep to cover up before the election.

It came as John Redwood, a former challenger for the Tory leadership, openly contradicted Mr Major by insisting that Mr Clarke had stepped out of line by saying it would be "pathetic" not to join the first wave of countries into a single currency. Tearing open the careful patching operation by Downing Street, Mr Redwood said the Government must clarify the situation.

"He recognised he did step out of line and that is why we had this tiff," Mr Redwood said on BBC radio. "This ought to be sorted out in private and then the Cabinet should sign up to a line they are happy with.

"We have seen this week the Chancellor is not happy with the collective line of keeping all the options open."

The Mainstream group of Tory MPs yesterday launched a fightback against the right, led by Mr Redwood, with a day's conference in camera to thrash out its strategy for the election.

The former Foreign Secretary, Douglas Hurd, made a rallying call to the left of the Conservative Party to speak up for One Nation principles before the general election, to stop a drift to the right.

Mr Hurd said: "The Prime Minister and his colleagues have been true to these principles. It is not enough to give them silent support at a time when the river is deep and turbulent and we stand on the edge of an election."

The former Foreign Secretary, who signed the pro-European grandees' letter to The Independent last week, said the Cabinet was clearly right in its decision to keep open the option on joining a single currency, although he added: "I have never been an advocate of a single currency. "

A former minister, David Howell, warned the conference that "sensible, middle-way, Conservative thinking on Europe" was in danger of being drowned out by the Euro-sceptics.

The former Tory Chief Whip, Tim Renton, hit out at Mr Redwood's followers: "It is a great pity the sceptics led by John Redwood are so ready to jump on the bandwagon and try and cause dissension on the Europe issue."

Another former minister, David Hunt, was dismissive of the Euro-sceptics' strength. "We have always had a small number of Conservative MPs who have disagreed vehemently with our policies on Europe. Nothing has changed since the early Seventies. They have always been there."