Rifkind in talks with ex-rebels on Europe

Malcolm Rifkind, the Foreign Secretary, has agreed to meet the eight Euro-rebels who lost the whip last year amid growing pressure from the Tory right for a pledge to hold a referendum on a single currency to beat the electoral threat posed by the Referendum Party, headed by the multi-millionaire Sir James Goldsmith.

In what was greeted last night by the hardest-line Euro-sceptics themselves as a significant ministerial shift, Mr Rifkind broke with a precedent set by his predecessor, Douglas Hurd, and agreed to direct talks with the eight, who are still meeting regularly as a group, despite having regained the whip.

The "whipless" group is due to meet later this week to finalise their line with the Foreign Secretary at their meeting next month.

But one prominent member, Sir Teddy Taylor, said yesterday they were likely to renew pressure for a referendum pledge as the best way to achieve government consensus over Europe in the run-up to the general election.

Earlier this month Mr Rifkind met a group of pro-Europeans angered by the strongly Euro-phobic tone of the Blackpool conference speech of Michael Portillo, the Secretary of State for Defence.

The Foreign Secretary reportedly reassured the MPs that lessons would be learnt from the adverse reaction at home and abroad to the language used by Mr Portillo.

Sir Teddy said yesterday that the former whipless rebels wanted to be "constructive and flexible" in response to what they see as a shift to a more Euro-sceptic approach by Mr Rifkind and John Major.

He strongly welcomed the decision by Mr Rifkind to offer a date. He said a majority of the former rebels were in favour of a commitment to a referendum before any move by Britain to agree fixed exchange rates with its European partners.

Disclosure that a date had been arranged for the meeting between Mr Rifkind and the former rebels comes after other prominent Euro-sceptics, including Mr Major's July leadership challenger, John Redwood, have been arguing that a referendum pledge on a single currency is needed.

While most - though by no means all - Euro-sceptics have long been pressing for the Prime Minister to make a clear commitment to a referendum on any British move to join a single currency, they believe the electoral plans of Sir James's Referendum Party is giving them new leverage to argue their case.

Sir Teddy also said yesterday that the need for such a pledge had been underlined by Sir James's election plans - which Tory strategists fear could affect the party's chances in marginal seats. Sir Teddy made it clear he saw no reason why such a pledge should not win the eventual support of Cabinet pro-Europeans like Kenneth Clarke, the Chancellor.

The latest signs of pressure for a referendum pledge came as it was emphasised in Whitehall that Mr Major was still sticking by his 1 March formula under which he had neither ruled in nor out the possibility of joining a single currency. Despite persistent attempts by senior right-wing ministers to persuade the Prime Minister to make a manifesto pledge to rule out a single currency in the next Parliament, Mr Major has still not resolved to do so.

Both Mr Clarke and Michael Heseltine, Deputy Prime Minister, are said to be still resistant to the idea, arguing that it would unravel the carefully constructed consensus on the issue.