Ministers under fire for blocking currency debate

The Government faces a backbench uprising today as preparations for the European single currency expose the divisions in both Conservative and Labour parties.

Tory MPs are furious at what they see as the Government "sneaking through" plans they fear would tie the pound to the euro even if Britain stayed out of monetary union. And Gordon Brown, the shadow Chancellor, came under pressure from the Trades Union Congress to adopt a more positive approach to the single currency.

John Redwood, last year's Tory leadership challenger, said that European Union plans for "reinforced convergence procedures" to be imposed on countries which do not adopt the euro would mean Britain could lose its opt-out from the discipline of the single currency.

Documents to be vetted by MPs in a committee session this morning include plans to increase pressure on non-joiners to bring their economies into line with euro countries, including a new exchange-rate mechanism and a stability pact, to impose large fines on countries which join the euro and fail to keep to budget limits.

In the documents, Kenneth Clarke, the Chancellor, defends convergence rules, and says that, whether or not Britain converts to the euro, "policies aimed towards convergence - low inflation and sound public finances - are sound in their own right".

John Monks, general secretary of the Trades Union Congress, said that whichever party wins the election will face a choice between joining the first wave of European Monetary Union from 1 January 1999 or seeing Britain isolated in Europe.

The wait-and-see option, reaffirmed by Mr Brown in his speech to the City last night, carries the risk that the United Kingdom would find it hard to join later on satisfactory terms, Mr Monks argued. Britain's negative approach had already "poisoned the water" for any new prime minister.

Mr Brown confirmed that Labour would hold a referendum if it decided to join "in the course of the next parliament", but Mr Monks warned that it should not be used as an excuse to delay entry.

Today, the Government relegates the most important issue facing the country to an obscure standing committee of mostly obscure MPs. Instead of Mr Clarke facing Mr Brown across the despatch box in the Chamber to discuss EU plans for the euro, Phillip Oppenheim, the most junior Treasury minister, faces Mike O'Brien, Mr Brown's number four, in a committee room upstairs.

The Government was condemned by 144 backbench MPs, including 94 Tories, for refusing to debate the plans on the floor of the House.

A motion by Jimmy Hood, Labour chairman of the all-party European Legislation committee, said the plans "raise questions of legal and political importance" and should be debated by the whole House. As well most of the Tory Euro- sceptic "usual suspects", the motion was also signed by pro-Europeans Hugh Dykes, Sir David Knox, Peter Bottomley and Sir Terence Higgins.

Mr Dykes said: "The essence of the ministerial posture is to say, `Don't let's discuss it, it's too awkward, let's push it to one side'. It is the most important subject facing the nation. I believe the public will get increasingly in favour of it as they discuss it."

And David Heathcoat-Amory, the former Treasury minister, said: "These regulations will set up a massive transfer of powers away from the House of Commons and I want that properly debated, properly voted on, so that everyone can know what we're doing."