Major says Britain 'is not a little England'

John Major yesterday confronted head-on extreme Europhobes inside and outside his party by warning that they were living in "cloud- cuckoo land" if they thought Britain could prosper outside the European Union.

In a move calculated to snuff out flirtation with the idea of eventual withdrawal from Europe - an idea fuelled by Sir James Goldsmith's high-profile entry into British politics - Mr Major declared that Britain "is not a little England and must never become so".

As John Redwood, the former Secretary of State for Wales and leading Euro-sceptic, held talks with the anti-EU tycoon in a London hotel, the Prime Minister derided as "naive, damaging and just plain wrong" the idea that Britain faced a choice between withdrawal and "going along with every demand our partners make".

But in a speech balanced to satisfy the party's more mainstream Euro- sceptics, Mr Major gave a clear indication that he was prepared to block progress at the Inter-Governmental Conference unless "backdoor" imposition of the Social Chapter on Britain was halted.

Mr Major denounced in his speech to the Institute of Directors the "creative" use of Health and Safety Provisions - over which the United Kingdom has no veto - to usher in measures such as the 48-hour week from which Britain's Social Chapter opt-out should protect it. And he promised that Britain would seek to "build a Europe that is more in our image . . . a Europe of nation states". He warned: "I don't want to be misunderstood about this; if old agreements are to be broken, I do not see how we can reach new ones."

Nevertheless, pro-European MPs professed themselves delighted at Mr Major's unequivocal rebuttal of those Tories and sections of the press who have begun to contemplate the prospect of withdrawal if Britain fails to repatriate significant powers from Brussels in the IGC.

Mr Redwood failed to persuade Sir James to lift the threat of fielding Referendum Party candidates against Tory candidates in the general election. But with Sir James pressing for a referendum on Britain's membership of the EU, Mr Redwood has floated the idea of a referendum before the election designed to demonstrate the British public's fear of a European "superstate".

t Economic optimism is at the highest level since November 1994 and John Major's personal rating the best since January 1993, according to a Mori poll for the Times. But Tory support remains stubbornly unchanged at 28 per cent, compared with Labour three points down on last month, at 54 per cent, and the Liberal Democrats one point up at 14 per cent.