Major persuades newspapers to curb attacks on Lamont

THE PRIME Minister personally intervened to limit Fleet Street attacks on the Government's economic policies, warning that it was undermining sterling and his hopes of economic recovery.

John Major's close colleagues confirmed that the Sunday Times had declared a five-month moratorium on attacks on the Chancellor at the weekend after talks with Andrew Neil, the editor. Mr Major is said to have called for a 'ceasefire' from Fleet Street to avoid the recession worsening.

But Labour MPs are dismayed at the clear evidence that some newspapers have responded. Dennis Skinner, the left-wing Labour MP, said it had partly silenced opposition of the Government's European economic policy, because the new Labour leadership, under John Smith, was not willing to call for a withdrawal of sterling from the Exchange Rate Mechanism.

'We need a cut of 3 per cent in interest rates. The only way we can do that is by getting out of the ERM, but the Labour leadership won't call for that, and now the editorial wimps of Fleet Street have caved in. So much for the freedom of the press,' Mr Skinner said.

'Downing Street has been working hard,' one source close to the Prime Minister said. Mr Major is understood to have dined with Mr Neil and five of his colleagues at the Sunday Times editor's London flat last Wednesday. Mr Neil was unavailable for comment last night.

Mr Major's friends attributed a similar softening of attacks over the Chancellor's handling of the economy by the London Evening Standard to the recent change of editor. 'Stewart Steven has always liked us,' one source close to the Prime Minister said.

Norman Lamont, the Chancellor, has been the subject of continuing attacks by the Sunday Times, and the Standard, for falsely predicting economic recovery and failing to be bolder in cuts in interest rates. Downing Street became exasperated with Fleet Street fanning the attacks from business leaders on economic policy last week.

The Daily Mail, which supported the Government at the election, demanded devaluation and a cut in interest rates. Charles Moore, deputy editor of the Daily Telegraph, said on Thursday morning: 'The situation is so bad that most experts now ask when, not whether the present policy will collapse.'

That afternoon, the London Evening Standard ran a full-page comment article headlined 'It's no time to panic, Mr Major', which praised Mr Major as a man of his word and defended the Chancellor. 'No green shoots? Where on earth are the Government's critics looking?' it said.

That was followed by the Sunday Times article which said Mr Major argued that newspapers were undermining his policies. 'The more newspapers bay for interest rate cuts, the more the markets put pressure on sterling and the more difficult it is to actually reduce rates. He has therefore called for a ceasefire and the Sunday Times will reluctantly accede to his request.'