Straw tells doubters that EU constitution is in UK's interests

The Government came under renewed pressure from all parties yesterday to hold a referendum on the proposed EU constitution.

Jack Straw, the Foreign Secretary - who was publishing a White Paper setting out the Government's response to the draft treaty drawn up by Valéry Giscard d'Estaing's European Convention - rejected the calls, insisting there would be no change to "the fundamental relationship between the EU and its member states."

Mr Straw told the House of Commons: "The proposals in [M. Giscard's] current draft treaty do not change the fundamental relationship between the EU and its member states; and on any analysis it involves less change than that in Maastricht and the Single European Act. The Government has therefore concluded that the right place to decide on any outcome of next month's Inter-Governmental Conference [in Rome] is here in this House and in this Parliament."

Peter Hain, the Leader of the House - who represented the Government on M. Giscard's convention - appeared to undermine Mr Straw's argument by saying that Tony Blair had privately described the treaty as "absolutely fundamental".

Labour backbenchers, including the former sports minister Kate Hoey, joined the Liberal Democrats and the Tories in criticising the Foreign Secretary's opposition to a referendum.

Tories accused the Government of betraying British interests by accepting a politically unified Europe and the handover of vetoes on 31 policy areas to Brussels. Iain Duncan Smith, the leader of the Conservatives, said the "White Paper is a white flag, a complete surrender to a European superstate."

Mr Straw insisted the constitution was in Britain's "national and patriotic interest" laying down a number of so-called "red lines" over which the Government would not budge. These include the preservation of the national veto in tax, social security, judicial criminal law and the setting of the EU budget.

Mr Straw also pledged to oppose new EU defence cooperation plans, putting the preservation of the transatlantic alliance at the centre of negotiations on Europe's new constitution.

In the aftermath of the Iraq war, which provoked a bitter rift among European allies, the Government served notice that EU defence would be an important issue when discussing the constitution.

Mr Straw's White Paper explicitly rejects the notion of an EU mutual defence pact, saying the Government "will not agree to anything which is contradictory to, or would replace, the security guarantee established through Nato".

It will also refuse to accept a provision on "structured cooperation". This would allow groups of countries, such as France, Germany, Belgium and Luxembourg, to forge closer military ties. It might also allow them to launch missions under an EU banner without approval from all member nations.

The Prime Minister said he was "confident" that the Inter-Governmental Conference would produce a constitution that was "good for Britain and good for Europe".

But in a blow to supporters of the euro yesterday, the embattled head of Britain In Europe - the campaign group launched four years ago with a fanfare of publicity by Mr Blair to sell the currency to the British people - confirmed that he was to quit the organisation.

Simon Buckby, a protégé of Peter Mandelson who has faced criticism over the group's failure to persuade the public to support the single currency, told The Independent: "If the referendum seems less close now than it was, then perhaps it's time for somebody else to carry that baton."