Eurosceptics hail Blair `victory'

EUROSCEPTICS CLAIMED victory yesterday after supporters of the single currency agreed to tone down their campaign in order to secure the support of Tony Blair.

Business for Sterling, the anti-euro group, said its rival, Britain in Europe, was a "campaign in chaos" after it agreed to promote the UK's role in Europe rather than launch an all-out drive for single-currency membership. Mr Blair has done a U-turn by agreeing to attend next month's launch of Britain in Europe, after threats by Tory heavyweights Kenneth Clarke and Michael Heseltine to pull out unless he turned up.

Stephen Byers, Secretary of State for Trade and Industry, said Mr Blair could endorse the pro-EU group, "because they've changed their position". Eurosceptics pointed out that Britain in Europe's website said it was "set up to inform the British people about the European single currency and convince them that Britain should join".

Nick Herbert, chief executive of Business for Sterling, said: "By insisting it has nothing to do with the single currency, Tony Blair has effectively emasculated the pro-euro campaign. ... Like the Government, Britain in Europe is committed to the single currency but will not say so for fear of public opinion. It is in full retreat alongside the Government."

Britain in Europe dismissed the claims as "rubbish," saying its aims had not changed. "We have never been wedded to the idea of rushing into the euro regardless," said Lord Marshall, its chairman, who welcomed Mr Blair's support.

Peter Mandelson, the pro-European former Cabinet minister, yesterday threw his weight behind British membership of the euro in a speech which called for Labour to pursue greater European integration, despite its defeat in this month's Euro-elections. In the first of two high-profile speeches on Europe, he also called for reforms of European institutions including changes to the EU presidency, held in six-monthly rotation among member-states. The former trade and industry minister told an audience in Brussels that Britain should work towards a "Europe with a capacity for united political action", including "more integration in economics and defence, crime and the environment".

Mr Blair was yesterday urged to appoint Mr Mandelson as "ambassador to Europe". Sir Ken Jackson, the Prime Minister's closest ally in the trade- union movement, declared that Mr Mandelson was being wasted as a backbench MP.

Sir Ken, general secretary of the Amalgamated Engineering and Electrical Union, who has crossed swords with the former minister on a number of occasions, said: "Love him or hate him, no one can take away the fact that the guy's got a lot of talent." Speaking at his union's annual conference in Jersey, the newly-ennobled Sir Ken registered his belief that Mr Mandelson, who will make a speech in support of the European currency to delegates tomorrow,should now be rehabilitated. Mr Mandelson resigned from the Cabinet at Christmas after failing to disclose a pounds 373,000 loan from the then postmaster-general, Geoffrey Robinson.