MAJOR SCRAPES IN BY FIVE VOTES

BY DONALD MACINTYRE

Political Editor

John Major's administration last night narrowly survived a cliffhanger vote on its European policy and averted a full-scale political crisis despite the spectacular defiance of Norman Lamont, the former Chancellor, in voting against his former government colleagues.

The Government defeated a Labour motion by just 319 votes to 314. Although the nine Ulster Unionist MPs voted with Labour in a direct protest at last week's Anglo-Irish Framework Document, four of the nine "whipless" Tory backbenchers exposed the first cracks in the rebels' solidarity by supporting the Government.

Richard Shepherd, Nicholas Budgen, Sir Richard Body and Michael Cartiss - all of whom forfeited the whip in defiance of the Government on the European Finance Bill last November - voted with the Government last night in a move that could presage the first tentative step towards their readmission to the Parliamentary Party. The other five "whipless rebels" abstained on the Labour motion.

The vote, which was swiftly followed by a more comfortable 326-313 victory on the Government's own anti-Labour amendment, came after Mr Major had sought to halt to Tory infighting over Europe by keeping open the option of joining a single currency while going out of his way to reassure Euro- sceptic backbenchers of his "wariness" about monetary union.

In a balancing act designed to minimise last night's threatened Commons revolt by Euro-rebels without disowning Kenneth Clarke, his Chancellor, Mr Major had gone his furthest yet in holding out the prospect of a referendum in the event of a government decision in favour of monetary union.

In the debate, the Prime Minister combined a spirited defence of the British opt-out from a single currency in the Maastricht treaty with an assurance that he did not anticipate British re-entry to the European exchange rate mechanism in the lifetime of this Parliament, casting doubt in the minds of some MPs over whether Britain would even be ready to join a single currency in 1999.

The outcome was a huge relief to ministers - even though the new-found loyalty shown by four of the "whipless" backbenchers was offset by a decision by William Cash, one of the leading Euro-sceptics outside their ranks, to abstain on the criticial Labour motion. Vivian Bendall, MP for Ilford North, also did not vote.

But the main sensation of the night was the decision by Norman Lamont - who last October became the first senior Tory politician to canvass the possibility of Britain's eventual departure from the EU - to support the Labour motion in the division lobby.

A few minutes earlier Douglas Hurd, the Foreign Secretary, had responded to the former Chancellor's second hostile intervention of the day by mocking his current opposition to the Government on Europe in a pointed reference to Mr Lamont's key role as an author of the Maastricht deal. Mr Hurd said he had "always admired" the skill with which he and Mr Major had together negotiated the opt-out.

Defending the Government's decision to postpone any decision until the whole "package" of economic, political and constitutional consequences could be assessed much nearer the time, Mr Major said that such a decision would require the decision of the Cabinet and Parliament and quite possibly the British people as well. A referendum could be both "necessary" and "desirable", he added.

He defended the Government's policy on the European Union in the face of an onslaught from the Labour leader, Tony Blair, who secured mastery of the House in his most assured and confident Commons performance since becoming leader last July.

Taunting Mr Major with Cabinet divisions on Europe, Mr Blair said his case was "that it is in Britain's interests to be at the heart of Europe''.

He continued: "The question is does the Government still believe we should be at the centre of Europe, or has its position changed? I think it has and with gathering force the centre of gravity in the Conservative Party is shifting - and shifting fast."

Deflecting Tory attempts to put him on the defensive by referring to Labour's and his own change of heart over Europe, he declared: "I would prefer to be leading a party that was anti-European and is now pro-European than leading a party that was pro-European and is becoming anti-European.''

But as ministers and government whips used all their persuasive powers behind the scenes to avert a defeat on the broadly worded Opposition motion attacking government policy on the EU, Mr Major issued only the most heavily guarded endorsement of his Chancellor's contention last month that monetary union in Europe did not of itself entail political union.

Mr Major responded to a potentially destabilising demand from Mr Clarke's predecessor, Norman Lamont, on whether he agreed with the Chancellor. He replied: "With one important qualification, I do believe that it is possible to move forward to monetary union without necessarily moving forward to political union. But the qualification depends on the nature and style of monetary union."

Mr Major did not spell out the nature of his qualification, but Whitehall sources confirmed last night that he was implying that the most fundamental constitutional issues would be raised if a decision to enter the EMU was such that it would compel Britain to align its tax and spending policies with those of other EU countries.

In a passage notable for its absence of any enumeration of the potential advantages of joining the EMU, the Prime Minister instead listed the potentially momentous implications both of going in and of staying out if other leading European countries decided to form a monetary union.

Inside Parliament, page 8

Andrew Marr, page 17