Decision on EU referendum expected to be made next week

Tony Blair has told his colleagues in the Cabinet he will make a decision on whether to hold a referendum on the new European Union constitution next week.

Mr Blair wants a "clear position" on the issue before the start of the campaigns for the local and European elections, The Independent on Sunday has learnt. The Prime Minister fuelled speculation he is about to make the dramatic policy U-turn when, yesterday, he repeatedly failed to rule out holding the poll.

He was urged to "clear the air" by one of a band of Cabinet ministers promoting what they claim would be a tactical masterstroke. One minister said that the moment had arrived for Mr Blair to carry the fight to the Tories and the Eurosceptic press who have been calling for the poll for more than a year.

"Every time we try to do anything on Europe we are accused of betrayal. We must clear the air. It is time to front these people up," said the Cabinet minister. The Prime Minister has sanctioned a government-wide push to promote the benefits to Britain of an enlarged EU this week.

Jack Straw, the Foreign Secretary, will launch a White Paper in the Commons tomorrow, spelling out the advantages of Europe. The next day, Mr Straw will make a keynote speech in Latvia on enlargement, one of the 10 states joining the EU on 1 May.

The Government also hopes to capitalise on public distaste caused by a visit to the UK by Jean-Marie Le Pen. The Front National leader is to address a BNP event in the Midlands on Saturday, as first reported in this newspaper.

Mr Blair had insisted voters would not be given a say on the controversial treaty, due to be finalised in June, because the convention will not bring about "fundamental change".

Mr Blair signalled a rethink yesterday, when he said that the Tories had brought about a "massive change" in the issue. "It is not actually our policy that has changed over the past few weeks. I think what has happened with the Conservatives saying they are going to renegotiate any constitutional treaty that is agreed is a massive change," he said.

Pro-Europeans in the Cabinet have been urging Mr Blair to hold a referendum since it became clear the treaty was likely to be agreed in June. The group - Charles Clarke, Peter Hain, Patricia Hewitt and John Reid - is being warily supported by Gordon Brown and Mr Straw.

Menzies Campbell, Liberal Democrat foreign affairs spokesman, also called on Mr Blair to seize the opportunity to call a referendum and "put the sceptics to the sword".

Mr Blair was warned not to "play games" with voters over the issue by Michael Ancram, the Shadow Foreign Secretary. "If the Government performs a total U-turn and holds a straightforward referendum ... we will welcome that," Mr Ancram said. "If they try and play games with the British people, the British people will see through them ... [The Conservatives] are against the constitution."