PM fuels hopes of Europe referendum

DONALD MACINTYRE

Political Editor

John Major took a further significant step towards a firm commitment to holding a referendum on the single currency yesterday as the Government faced another uncomfortably close vote tonight on Europe.

But although it now looks inevitable that Mr Major will promise that a Tory Cabinet would not enter the single currency without a referendum, ministers have yet to resolve the crucial question of whether the Cabinet would have to then unite behind a decision to join Economic Monetary Union (EMU).

Mr Major made it clear in the Commons yesterday that a referendum commitment was before ministers "for consideration" after Douglas Hurd, his former Foreign Secretary, went public for the first time in indicating his strong support for a referendum.

The exchanges came as the Government was faced with a Eurosceptic rebellion in a vote on fishery quotas tonight. The revolt has been fuelled by alarm over the decision by the Madrid summit to confirm a timetable which will mean Britain having to decide early in 1998 whether or not to join EMU and adopt the "Euro".

Mr Major brushed aside a claim in the Commons yesterday by William Cash, the Eurosceptic Conservative MP, that he had "sold the pass" by not challenging the "determination of Germany and capitulating France" to go ahead with further European integration.

But the Prime Minister further alarmed Eurosceptics by confirming that Britain would not have to rejoin the European Exchange Rate Mechanism for two years to qualify for monetary union. Several prominent Tory and Labour Euro-sceptics, including Peter Shore, who raised the issue yesterday with Mr Major, had hoped that the stipulation would prevent British EMU membership in 1999. Labour last night tabled a Commons amendment reflecting its argument that the United Kingdom's fishery quotas agreed 12 months ago would have been higher if Britain had played a more positive role in Europe. But the party is far from confident of defeati

ng the Government - partly because as many as five of its MPs may be too ill to vote. The Liberal Democrats - albeit with low expectations of victory - and the Scottish Nationalists will support Labour and the Ulster Unionists will decide their stance later today. Seventeen Tories last night underlined the prospect of a rebellion by signi

ng an amendment calling for withdrawal from the Common Fisheries Policy. Kenneth Clarke, the Chancellor of the Exchequer, has indicated that he would not push to the point of resignation his strong opposition to a plebiscite. But Eurosceptic Cabinet members are split with Michael Howard, the Home Secretary, in favour andMich ael Portillo, Secretary of State for Defence, strongly opposed. Some ministers are arguing that a future Tory prime minister should follow the example of Harold Wilson in 1975 and allow his Cabinet colleagues the freedom to campaign according to their personal beliefs in any referendum. But the argument pressed priva

tely on Mr Major by Mr Hurd, when foreign secretary, was that he should insist that, once having taken a decision to join EMU, the whole Cabinet would have to unite behind the policy or resign. Tony Blair, the Labour leader, has already made it clear that he would insist on a a united Cabinet if, as prime minister, he called a referendum on a single currency.