MAJOR OPENS DOOR TO REFERENDUM

SINGLE CURRENCY MUST HAVE NATION'S BACKING

The likelihood of a referendum on Europe hardened significantly yesterday after John Major stressed the Government's intention to hold one if circumstances were "appropriate".

As senior Labour Party figures raised the stakes in the debate on Europe's future and on monetary union by continuing to dangle the prospect a referendum, Mr Major went the furthest yet in indicating the Cabinet would not agree to constitutional change or a single currency without putting it to the popular vote.

The move was seen by both pro- and anti-European wings of the Tory party last night as showing Mr Major expects to state in advance he would call a referendum if the Government was ready to sanction UK membership of a single currency.

Although ministers continue to insist there is every prospect that the 1996 Inter-Governmental Conference on the EU's politicial future will not result in calls for constitutional change, a similar formula could also be adopted if the IGC requires further pooling of sovereignty.

In the latest example of Mr Major's rapidly evolving policy on the subject, he declared in the Commons: "One will have to see what the circumstances are. The circumstances might be appropriate to have a referendum and if they are we will."

He fuelled fears among pro-European backbenchers that he was playing to a Eurosceptic gallery yesterday when he took a gratuitous sideswipe at his fellow government leaders by pointing out that such was the lack of regular scrutiny to which they were subjected that some of them could "scarcely find their way to their Parliaments with a guide dog.''

The remark was siezed on by Paddy Ashdown, leader of the Liberal Democrats, who called on him to "withdraw unequivocally'' this "insulting comment".

And according to reports circulating in Westminster last night, Mr Major used a visit to the Commons tea room after his statement to join a table of Eurosceptics, which included two MPs who have lost the whip for their part in the European Finance Bill revolt two weeks ago, Sir Teddy Taylor and Richard Shepherd. Mr Major has made it clear that the rebels will not regain the whip unless they show consistent support for the Government. The next opportunity for Euro-rebellion comes tomorrow when there willbe a vote on Spanish fishermen gaining greater rights in UK waters.

But there were also signs that Mr Major's growing attachment to the idea of a referendum goes beyond a mere short-term tactic to appease critics of his European policy - even though members of the right-wing 92 group were last night treated to a a keynote address by the pro-referendum Kenneth Baker, the former home secretary.

The prospects that he and Douglas Hurd, the Foreign Secretary. who has not ruled out a referendum, could win over Kenneth Clarke, the Chancellor, and Michael Heseltine, the President of the Board of Trade, both of whom are opposed to referenda, have bee

n increased by the carefully neutral line taken by the party leadership on the issue of a single currency itself.

Labour's deupty leader, John Prescott, offered more evidence of Labour's growing enthusiasm for a referendum by saying a Labour government would "definitely'' hold one if the 1996 conference resulted in important changes to the constitution.

Tony Benn was last night voted off the Committee of Privileges by MPs after he insisted on publishing reports of its proceedings during its inquiry into "cash for questions" charges against Graham Riddick and David Tredinnick. The Commons took the decision by 181 votes to 52.