Cabinet rift over asylum crackdown

Tony Blair's proposals for the European Union to crack down on illegal immigration were in jeopardy last night after they ran into strong opposition within the EU and inside his own Cabinet.

Clare Short, the Secretary of State for International Development, is fighting a rearguard action against plans – backed by Britain, Spain and Italy – to link EU aid and trade agreements with countries outside Europe to their record on readmitting people whose requests for asylum have been turned down.

Meanwhile, EU foreign ministers meeting in Luxembourg yesterday pointedly refused to endorse the controversial plan amid growing fears that it would punish poor countries. It may now have to be watered down before a summit of EU leaders in Seville on Friday, at which illegal immigration is expected to top the agenda.

Mr Blair, who wants tough action on asylum in an attempt to halt the rise of the far right in Continental Europe, said last month: "We should benchmark the performance of third countries and be willing to use the EU's economic and financial clout with those which are not co-operating."

His proposal was backed enthusiastically by Spain, which holds the EU's rotating presidency. But Mr Blair and Jose Maria Aznar, the Spanish Prime Minister, will have to consider a partial retreat when they meet in Downing Street today.

Ms Short, who is urging Mr Blair to think again, said: "It is being discussed in government. I have no comment to make."

But Whitehall sources insisted the plan was backed strongly by Downing Street and the Foreign Office. One added: "Clare Short is not going to the Seville summit. Tony Blair and Jack Straw will be at the Seville summit."

At the Luxembourg meeting, France and Sweden took the lead in opposing the proposal and won support from Finland, Luxembourg and Portugal. They focused on two paragraphs of a document which made clear that, despite some protestations to the contrary, Third World countries could lose aid or free trade arrangements if they do no fall into line on asylum-seekers.

The report proposed that aid allocations to any "non co-operative country" be reviewed. Similar threats apply to preferential trade deals between the EU and poor nations, where the plan included the "possible suspension of the agreement".

Mr Straw, the Foreign Secretary, called on the EU to get tough with countries that failed to stem the flow of migrants or to re-admit those refused asylum. He said: "We must send a powerful signal to some third countries that, if they want to develop a strong relationship with the EU, they must co-operate better in fighting illegal migration."

Mr Straw conceded that there was a "slight difference of view" on the emphasis to be placed on putting pressure on countries judged not to be co-operating with the EU, as opposed to offering incentives to those that do.

France and Sweden argued that imposing financial penalties on countries which are already poor was likely to increase deprivation and lead to a rise in the number of emigrants.

Antonio Martins da Cruz, the Portuguese Foreign Minister, said: "We cannot threaten them. What we need is to support them, not reprimand them."

A Swedish diplomat added: "We would like to have a proper balance between the carrot and the stick. If you put a lot of emphasis on the stick it will be counter-productive."

Although France suggested amendments that would have softened the text circulated yesterday, Spain rejected the idea of change, saying it preferred to take the matter directly to heads of government in Seville.

Joschka Fischer, the German Foreign Minister, argued that the EU had "to find a balance between the EU's big humanitarian debate and the fight against illegal immigration".

Mr Aznar said: "We will co- operate with these countries but they have to comply with their obligations and pursue the mafias. If they do not comply with these obligations, the European Union should reserve the right to review its co-operation."