Major could get lifeline on Europe

A compromise which would allow John Major to rescue ratification of the Maastricht treaty in return for Britain remaining outside the European exchange rate mechanism is emerging from the wreckage of the Prime Minister's economic and European strategy.

Such a compromise, being privately discussed among ministers, could strain the patience of some Cabinet ministers who want to see a return to the ERM as soon as possible. They include Michael Heseltine, President of the Board of Trade and John Gummer, Minister of Agriculture, who expressed support for the ERM disciplines yesterday.

This would enable Mr Major to restore some of his damaged authority at next week's Conservative Party conference by reaffirming his vision of Britain at the heart of Europe, without explicitly abandoning the possibility of rejoining the ERM in the long-term.

Leading ministers who privately opposed the Maastricht treaty said yesterday they were ready to drop their objections because they believed there was no chance of Britain's European partners fulfilling Mr Major's conditions for structural reform to allow the re-entry of sterling. That had killed the threat of Britain joining a single European currency, one of their main fears.

A Cabinet minute is circulating among ministers, who are using it as evidence of that. One said: 'I have seen a Cabinet minute which says we cannot possibly look at re-entry to the ERM for some time, but we cannot close the door formally. To me, that means the ERM is dead.'

Britain's partners are expected to reject an attempt by Norman Lamont, the Chancellor, to debate the issue at a meeting of finance ministers today in Brussels.

Mr Major's chances of winning a Commons majority were enhanced by Jack Cunningham, the Labour spokesman on foreign affairs, who said that Labour would not vote against ratification. But it will depend on whether Mr Major can secure agreement on subsidiarity - under which certain decisions are taken at national level - at the European summit on 16 October.

Some Tory anti-Maastricht die-hards plan a show of strength at the party conference. But the lead given to the backbench by the 'Euro-sceptics' in the Government could be enough to enable Mr Major to secure a majority.

Michael Howard, Secretary of State for the Environment, who does not wish to see early re-entry to the ERM, said on Walden on ITV:'I have no intention of resiling from the commitment which the Government made to the Maastricht treaty . . .

'When we have made the treaty more acceptable to people, when we have a clear statement of the way decisions are to be left to member states and national parliaments, you will find that the treaty becomes much more acceptable to people in Parliament, to the Conservative Party and the people of this country as a whole.'