Lilley presses Major to let rebels return

Turmoil in the Conservative Party increased yesterday as Peter Lilley, a leading Eurosceptic in the Cabinet, urged John Major quickly to restore the whip to the eight Tory rebels who refused to back him in a vote of confidence in the Commons last week.

The Social Security Secretary said he wanted the whip restored ''as soon as possible''. It was essential, he said, that the party was able to unite for the next election around a ''Eurosceptical position''.

Mr Lilley's remarks, on the eve of a cliff-hanger vote on increasing VAT on fuel, will be seen as disloyal to the Prime Minister and annoy Mr Major's supporters, who think the action he ordered was a necessary show of firm leadership.

But senior Tory figures openly questioned the Prime Minister's judgement in effectively throwing away the Government's majority to limit the rebellion on the European Finance Bill. The Chief Whip, Richard Ryder, was also being privately criticised.

Calls for the whip to be reinstated for the rebels were increasing. The rebels won support from leading Tory backbenchers, including Kenneth Baker, the former chairman of the party, and George Gardiner, chairman of the Thatcherite 92 Group of Tory MPs.

''I think we want these people to work their way back into the party and take the whip again and get over that division,'' said Mr Lilley during a BBC television interview yesterday. ''We want to go united into the next general election on a Eurosceptical position, a strong pro-British position which will be a marked contrast to the Labour Party who want to submerge us lock, stock and barrel in a European socialist super-state.

''We will only be able to reap the rewards of having a typically Tory stand if we can do so as a united party.

''I hope the rebels who lost the whip as a result of that rebellion will work themselves back into the party in due course. Let us hope they get themselves back on board as soon as possible.''

There was a growing belief among Conservative MPs and Cabinet sources yesterday that the Prime Minister will be forced to relent early in the new year and restore the whip to the rebels, although it is unlikely that this will buy their silence on Europe.

A ninth MP, Sir Richard Body, resigned the whip in protest at Mr Major's ''strong-arm'' tactics, although he voted with the Government on the European Finance Bill. MPs are convinced that, despite the opposition by Michael Heseltine and Kenneth Clarke, Mr Major will seek to reunite the party by promising a referendum on the outcome of the 1996 Inter-Governmental Conference on Europe's future.

The rebels were unrepentant yesterday. One, Teresa Gorman, said that they were in a strong position because they could overturn the Government's majority.

''The Government has given us some power which we lacked before. We will have to think about that very carefully,'' she said.

The Government may have to rely on the rebels' support to defeat the attempt by Labour tomorrow to veto the imposition of the second stage of VAT. The Ulster Unionists, who helped the Government to ride out the rebellion on Europe, will vote against the Government on VAT, making a defeat more likely.

At least three Tory MPs, Richard Shephard, Nicholas Winterton and Phil Gallie, have made it clear they cannot support the Government.

Other Tory MPs are also expected to rebel on the grounds that tomorrow's vote is not the end of the issue; a defeat will give the Commons the chance to vote on it at the end of the Finance Bill putting the Budget into effect, which may not happen until next February.

Mr Baker, a former home secretary, attacked Mr Major in the bluntest terms for turning the Conservatives into a minority government without losing any seats, a feat unequalled by any Conservative prime minister in the 19th or 20th centuries.

''If this had happened accidentally, then the anger would be abated by amazement and chagrin, but it would appear this was carefully thought-through and planned,'' Mr Baker wrote in the Sunday Telegraph. If he did not act now, the Prime Minister would irreparably split the Tory party, he warned.