Tory Conference: Cabinet wets rebel over compromise on Europe

A rebellion by the pro-European "wets" in William Hague's Shadow Cabinet marked the first defeat for the right wingers behind the Conservative leader. Colin Brown, Chief Political Correspondent, says the Euro-sceptics are ready to fight back.

A fresh split is looming in the Shadow Cabinet over the compromise policy to rule out a single currency "for the foresee- able future".

The "wets" in the Shadow Cabinet forced William Hague to retreat from his commitment that the Tories would oppose entry into a single currency for ten years.

But leading Euro-sceptics in the Shadow Cabinet said the compromise could not last, and they are preparing for a showdown with the pro-European frontbenchers who forced Mr Hague to back down. They are insisting on making it clear that Britain would stay out until 2007, the end of the next Parliament.

"We need to put some end dates in the policy. The compromise wording is too vague and people are picking holes in it. None of us know what it means. We have got to get this settled and we are going to return to it," said one Shadow Cabinet minister.

Some Euro-sceptics fear Mr Hague is showing tendencies towards compromise like John Major and want the row reopened at next Wednesday's meeting of the Shadow Cabinet. Peter Lilley, the shadow chancellor, tried to paper over the cracks yesterday, telling the Tory conference in Blackpool that some "good Conservatives" believed entry into a single currency could be in Britain's interests at some stage. But the divisions in the Shadow Cabinet are so deep that some on the left are ready to resign, if they are pushed too far.

David Curry, the party's agriculture spokesman, has made it clear to friends that if the Government calls a referendum, he will campaign for a "yes" vote for Britain to enter a single currency, in breach of a Shadow Cabinet line laid down by Mr Hague.

The Tory party leader has told Shadow Cabinet members that they will be expected to campaign for a "no" vote, while allowing Tory MPs, including Kenneth Clarke, a free vote on the issue.

A referendum could also cause a dilemma for other pro-European Shadow Cabinet ministers who forced Mr Hague to retreat over his policy on the single currency.

The first serious rebellion to confront Mr Hague was staged on the eve of the conference by Sir George Young, shadow defence spokesman, (Stephen Dorrell (education and employment), Alastair Goodlad (international development) and Mr Curry.

They dug in their heels after being told the Shadow Cabinet had agreed to continue with the policy of ruling out entry to a single currency for 10 years. The decision was reached at a meeting last week of the Shadow Cabinet in the Salisbury home of Lord Cranborne, the Tory leader in the Lords, and a leading Euro- sceptic.

The four were absent from the meeting, and suspected the Euro-sceptics in the Shadow Cabinet were trying to bounce them into accepting a hard line against the euro. Mr Hague telephoned each of the four individually to explain the policy decision.

They had no time to consult each other, but each made it clear to Mr Hague that the "10-year" formula would be unacceptable. A compromise was lashed together over the weekend, with Mr Hague faxing the four Shadow Cabinet rebels with the wording of a new formula, that the Tories would oppose a single currency "for the foreseeable future".

Michael Howard, the party's foreign affairs spokesman and leader of the Euro-sceptics in Mr Hague's team, agreed to the wording, but was given the freedom, if pressed, to repeat the "10-year" formula underpinning it.