Now it's your call on Europe, Mr Blair

What a temptation for Tony Blair. On Tuesday, John Major, with all the enthusiastic spontaneity of an RAF Tornado pilot paraded on TV by his Iraqi captors, restated the policy as spelled out by Michael Heseltine: the Government will continue to leave open the issue of monetary union.

Now imagine this: in a few days' time, Blair announces that Labour will not take Britain into a single currency in the first wave - or perhaps even in the next Parliament. Kerpow. There is mayhem in the Tory party: Conservative Central Office foresees Labour's rating among an increasingly Euro-sceptic public breaking all known records. Worse, the grievance of the Euro-sceptics, already incandescent at Major for his refusal to do exactly that, is now compounded by the realisation that if he had taken their advice he would have avoided being humilatingly outflanked by Blair.

But the Prime Minister still faces a gruesome dilemma. If he decides, as electoral logic now dictates and most of his Cabinet are demanding, to rule out a single currency after all, Clarke (and perhaps Heseltine) will go, woundingly pointing out as they do, that Tony Blair is now running Major's European policy. And if he doesn't, his electoral strategy is holed below the waterline - and not just because the Tory party would be torn apart. Instead of tub-thumping British nationalism against wishy washy Labour pro-Europeanism, the Tories are stuck with being the puny ditherers, against Labour, unflinching defenders of the pound.

This isn't just fiction. Indeed, it describes as precisely as possible the political earthquake that would be detonated by a Blair decision to rule out joining EMU at its outset. And there are other reasons why it is tempting. Gordon Brown wouldn't like it any more than Clarke. But Robin Cook, and Jack Straw would welcome it, as would, perhaps, John Prescott and Margaret Beckett. Nor does it conflict that much with the assessment of a number of central bankers, economic commentators and even Treasury officials who frequently cast grave doubt on the wisdom or probability of early British EMU entry. You don't have to be a deep-dyed Euro-sceptic to harbour grave doubts about whether, in the real world, a Labour government would take Britain into a single currrency during its first Parliament. It wouldn't even be such an unmanageable U-turn to rule it out. Did not Tony Blair, in his recent speech in Paris, dwell at some length on the potential obstacles?

So why on earth not do it? The diplomatic reason is that it would certainly set back Tony Blair's professed intention of making a fresh start in Europe. Even those national leaders sceptical about whether a Labour Britain would join, would squirm. And anyway, the opinion poll evidence isn't as persuasive as the sceptics suggest. It's true that most polls show convincing majorities against EMU. But it's also, perhaps mysteriously, true that they show equally convincing majorities in favour of maintaining an open mind until the decision has to be taken. Equally disappointed would be those big businesses which may well start beating the drum for EMU once the election is over.

Out would go a lot of Labour's astonishing, but far from baseless, claim to be in sight of replacing the Tories as the party of big industry. Finally, Blair may yet just want to go in during the next Parliament. After all, if economic arguments - monetary stability, fiscal discipline, lower transaction costs - work at all, they work especially for a Labour Party historically prone in government to market pressure to maintain a credible counter- inflation policy.

These may be persuasive; and they are part of why Blair won't rule EMU out. But they aren't, perhaps, as exciting as the short-term electoral one for ruling it out. So Labour electoral strategy junkies should consider a further point. Let's suppose that a Blair-led government does after all decide to go into EMU. First it has to get it through Parliament. It's a safe bet that Clarke would, as Roy Jenkins did over EEC entry in 1972, defy a three-line whip in his own party to back Labour. And he might take a significant minority of Conservative MPs with him. Then Labour has to get it through a referendum in which - unlike in 1975 - the main parties will both maintain collective Cabinet and Shadow Cabinet responsibility. Suddenly, the Tory split which has never quite been a split becomes a reality. Suddenly, the possibility of a pro-European, centrist, grouping sympathetic to the principal aims of a Blair government becomes a reality. (Even more so if a referendum opts for a version of electoral reform which would sustain a Clarke-led grouping as a new party.) And suddenly a Blair- led administration underpinned by alliances with Liberal Democrats and pro-European Tories starts to look like a very long-term prospect indeed. Fantasy? Perhaps. Impossible? Not quite.

You won't hear a single senior politician contemplate anything like this this side of the election. Moreover, long before this, Blair could face internal dangers of his own. An anti-EMU Shadow Cabinet majority, perhaps led by Robin Cook, would probably be as easy to assemble as a Cabinet one, especially if Blair allowed policy on a single currency to drift through the next Parliament. But there is one big difference: modern Labour politicians divide over EMU on economic and not constitutional grounds.

No one, Cook included, has said they object in principle. So it's not just that it's not in the national interest to rule it out now. He is also free to remind Euro-sceptic supporters till he's blue in the face that Labour would only join a single currency if Cabinet, People and Parliament agreed. A triple-lock, which would be enough for John Major, too, if he had a remotely manageable party.