Minister's remarks put cabinet euro split in public glare

Europhiles are battling to keep alive the option of a referendum over joining the single currency, writes London Editor Frank Millar.

Mr Tony Blair's cabinet split over the euro went public yesterday as Scottish Secretary Ms Helen Liddell challenged the Chancellor Mr Gordon Brown's presumed power to determine the if-and-when of British membership.

Her intervention - reportedly made with the Prime Minister's authority - marked a dramatic escalation of the battle by pro-European ministers and MPs to keep alive the option of a euro referendum in the lifetime of the present parliament.

Mrs Liddell's assertion of the cabinet's collective right to decide the issue coincided with reports that Mr Blair had given ministers the green light to argue the case for joining the single currency, even as the Chancellor prepares to find his five economic tests for membership "not yet" met.

It also came on the heels of a direct warning to Mr Blair that the cross-party Britain in Europe campaign faces collapse if the government fails to call an immediate referendum or at least promise to do so before the next general election.

The former Conservative deputy prime minister Lord Heseltine echoed that warning, accusing the prime minister of "dithering" over the single currency, and suggesting that Mr Blair "has probably lost control of the Chancellor".

Liberal Democrat treasury spokesman Mr Matthew Taylor spoke of "a feeling of betrayal" arising from the suspicion that the Blair government was content "to paper over its own divisions on the euro by postponing a referendum indefinitely".

Mr Brown tried to defuse Labour's growing tensions, assuring the party's Europhiles he was not about to kick the question of joining the single currency into the long grass.

In an interview on GMTV's The Sunday Programme, Mr Brown asserted his own pro-European credentials, saying he would be prepared to back Britain joining the euro if it was in the national economic interest.

He also attacked the Conservatives for ruling out membership for reasons of dogma.

"I have always been pro-Europe. And by history, by geography, by economics we are very much part of Europe," he said. "It would be entirely the wrong policy to take the Conservative Party's view on this issue. They would refuse to join the euro even if it was in the national economic interest to do so. That is to rule out the euro on grounds of dogma, something that is unacceptable to me."

Reflecting some lingering hope that the Chancellor might yet surprise the pundits, Lord Heseltine told Sky News: "I have to say as a caveat... that this government is such an expert at spin that it is not inconceivable that they [Mr Blair and Mr Brown] have contrived this row between the two of them so that the surprise will be the greater when they announce that harmony has broken out."

However, there was further evidence of the battle of wills between Mr Blair and Mr Brown yesterday when Mr Bill Morris, outgoing general secretary of the TGWU and a close ally of the Chancellor's, cited the latest edition of the European Central Bank's Monthly bulletin to suggest that "the sacrifice" of the British National Health Service could be the price of an early referendum on the euro.

And former leader of the Commons, Mr Robin Cook, was still anticipating a decision against a referendum during this parliament when he resumed his call for a timetable to meet the economic tests and hold a referendum early in the next one.

He told Sky's Sunday with Adam Boulton programme: "We should stop dithering about if we are going in, recognise we are going in, and if all the tests are not met now we have got to set ourselves a target when we are going to meet them."

In her Sunday Telegraph interview, Mrs Liddell, said the consequences for Scotland were vitally important, and suggested a "sixth test" be added to the Chancellor's list - on the "opportunity cost" of not joining the euro.

Of the decision itself, Mrs Liddell said: "This is probably one of the most momentous decisions we are going to make. It should be for the whole cabinet. It cannot simply be delivered to us by the Chancellor like the Budget."