Danish anger over borders could let UK off the hook

Tony Blair may be able to avoid a damaging dispute at today's Noordwijk summit over sharing immigration and justice policy, thanks to new Danish warnings that it may have to veto the entire proposal.

Efforts to secure new joint powers to pass immigration laws and oversee frontier controls have brought the Labour government close to serious confrontation with its European Union partners, and the issue is expected to overshadow today's talks on the new European treaty.

Although Mr Blair has been assured that Britain can maintain its internal frontier checks, the Government is expected to tell other member states today that it still fiercely objects to the more general plans to pool powers in immigration and justice fields.

Yesterday, however, it suddenly emerged that Denmark could let Britain off the hook. The latest proposals on power- sharing have angered Denmark, which already argues that it could not accept them without holding a referendum.

As a result European officials were last night back at the drawing boards and some officials predicted that the entire proposal would have to be re-worked.

"It is all a mess. I don't know, at this stage if we can find a solution," said one European Commission source.

The Noordwijk summit will give Mr Blair his first chance to set out his new government's bottom line on the Amsterdam Treaty talks, and British officials are already talking confidently about smoothing the way to a satisfactory deal. "We are not saying it's a done deal, but we are quite confident," said one Foreign Office source.

In addition to immigration and justice, British officials point to three other outstanding problems which must be resolved: defence, flexibility and fish quota-hopping.

France and Germany are proposing major new powers for the EU over defence, suggesting that the Western European Union, Europe's de facto defence arm, should become a mini-Nato, incorporated into the EU structure.

Britain, however, argues that the EU should only have powers to dispatch troops for humanitarian and peace-keeping tasks, and opposes any move to create a European defence separate from Nato.

All Europe's neutral states back Britain on defence and the Franco-German plan is already being watered down.

Current plans to allow some member states to share powers "flexibility" - or at a different pace to others, are currently opposed by the Government, but officials predict that a compromise formula would not be hard to achieve.

In return for compromise in some of these areas, Britain is asking for a protocol which would curb the practice of fishing vessels quota-hopping.

Talks in Brussels this week produced major progress on quota-hopping, opening up the way to the Amsterdam deal.