Italy brokers deal to end EU defence rift

Italy is brokering an end to Britain's rift with France and Germany over EU defence, tabling plans yesterday that would allow the UK to play a key role in a new European military "hard core".

The ideas, which will be discussed by defence ministers today in Rome, could end the dispute over whether the EU needs to set up a military headquarters outside Nato.

Italy, which holds the EU presidency, has proposed plans to form a defence advance guard, operating similarly to the eurozone, which has strict rules for those inside the EU's single currency. One new suggestion is that "hard core" member states would have to pledge a specific proportion of their budget for defence.

Italy needs a deal on defence if it is to succeed in agreeing an EU constitution by the end of the year. It is anxious to help the UK, acknowledging that a European defence policy without Britain would be likea single currency without Germany.

The British Government has wavered over EU defence co-operation. It has been committed to the initiative in principle since 1998, but is anxious not to do anything to undermine Nato.

Divisions were highlighted in April, when France, Germany, Belgium and Luxembourg, agreed to set up an embryonic European military planning centre in the Brussels suburb of Tervuren. After divisions caused by the conflict in Iraq, the initiative was seen by Britain as a threat to the transatlantic alliance. Britain suggested setting up an EU military planning cell at Nato's military headquarters in Mons, Belgium, saying this would avoid duplication of resources.

As a compromise, Italy has now suggested forming a mobile team of planners for EU military operations. This pool of about 40 officers would rotate around national military headquarters in the UK, France, Germany, Italy and Greece. The idea is acceptable to Britain because it would not set up an alternative centre to Nato. Moreover, the EU already uses national headquarters for operations such as its intervention in the Democratic Republic of Congo. British officials welcomed the Italian proposal yesterday as a "step in the right direction" although there are doubts on the practicalities. Italian ideas on an EU military hard core were received more coolly, although Britain accepted the principle of such a plan at a summit with France and Germany two weeks ago.

Britain, which is the EU's biggest military power, is keen to encourage others to up their spending on defence, and might welcome Italy's proposal to force the inner-core countries to give firm spending pledges.

But London wants to clarify the rules under which the new inner core would operate. Any deal may be conditional on scrapping ideas for a mutual defence pact within the EU, something the UK sees as Nato's job.

* Russia's Defence Ministry says it will have to make radical changes in its military reform plans, including its nuclear strategy, if Nato continues to exist in its present form. The warning was given in a document on the modernisation of the armed forces.