THE British people will have a referendum should a Conservative government decide to join a single European currency after the next general election.
Mr John Major's cabinet made its long awaited decision yesterday, in the hope of bringing to an end months of in fighting overshadowed by speculation that Chancellor Kenneth Clarke might resign over the issue.
Mr Malcolm Rifkind, the Foreign Secretary, announced the decision at a press conference at Conservative Central Office, after a lengthy "political" cabinet meeting at Downing Street.
The referendum pledge, Mr Rifkind confirmed, would be enshrined in the Conservative election manifesto. Assuming a Conservative victory, Mr Rifkind said if the cabinet decided to join a single European currency it would prepare legislation allowing it to come into force only after approval by popular plebiscite.
As expected, Mr Rifkind confirmed that this would be government legislation, and that ministers would be bound by the normal rules of "collective responsibility. This would mean that, in the event of a decision to join, Euro sceptic ministers would be forced to resign if they wished to campaign against the decision.
Chancellor Clarke yesterday defended the cabinet's decision, despite his long standing opposition to a referendum, and insisted he could find himself "on either side" of the argument when the time for decision came.
Side stepping repeated questions as to whether he had threatened to resign, Mr Clarke said: "I did not threaten my colleagues with resignation this morning. We have the agreement that there will be a collective decision when the time comes."
He maintained the move represented the only "sensible policy" for the government and country to have on the single currency. Mr Clarke added: "We can conceive of circumstances where it would be in our national interest to join . . . We can conceive of circumstances where it might not. That's an open question and it could go either way."
Mr Clarke told the BBC's World at One radio programme: "I am still opposed to referendums and I don't think they should play any part in the ordinary political process of this country. But the position of a single currency is that we have a clear policy that we will eventually decide whether or not to join when we see what it looks like, when it has been finalised, and when we judge what the national interest is."
The Chancellor added: Government policy is that it could be in the national interest to join, but there could be circumstances where it was not.
"At the next election we won't have a mandate one way or the other. We will say we are going to determine it in the British interest and because of that if it comes up during the next parliament the government will make up its mind.
"If it says we should join it will take a bill through parliament, and every MP will have to make up his or her mind, and parliament will pass an act which will then come into effect if it is ratified by a referendum."
Mr Rifkind said a referendum would be conducted on a simple, neutral question on the lines: "Should the UK take part in a single European currency as from (the appropriate date)?" A simple majority would be taken as confirmation of parliament's decision.
Labour claimed the deal was a sham, exposed by the Chancellor's own comments. Shadow chancellor Mr Gordon Brown said that, within minutes of agreeing to a referendum deal, the Chancellor had reaffirmed his opposition to referendums.