Tories warm to idea of consulting voters pe 1/45point

Bowing to Euro-rebel demands could be the only way of reuniting the Conservative party. Donald Macintyre assesses a high-risk strategy The mounting debate within the upper reaches of government about a referendum on Europe is not quite what it seems.

At least until yesterday, when a number of Tory pro-Europeans suggested with varying degrees of enthusiasm that a referendum would be desirable or inevitable, it looked as if the internal argument was a simple one between the left and right of the Conservative Party.

Its origins are impeccably Thatcherite; it was, after all, the former prime minister who first floated the idea of a referendum on the single currency in a famous interview with the Sunday Telegraph when she was fighting for her political life in November 1990.

And it has since become an article of faith among many if not all Euro-rebels who lost the whip a fortnight ago today.

To underline the point, the two biggest pro-Europeans in the Cabinet, Kenneth Clarke and Michael Heseltine, are reliably reported to have entered the discussion with a strong pre-disposition against the idea.

So it has been common to assume that by conspicuously opening the door over the last few weeks to the possibility of a referendum, John Major, and perhaps more surprisingly Douglas Hurd, have simply decided that if you can't beat them, join them. In other words,the only way to restore the Tory party'sshattered unity is to make a concession to the Euro-rebels which has some hope of restoring the government's working majority.

Underlying this assumption is that there is really nothing in a referendum for the pro-Europeans except the grave risk that the British people would turn against the pooling of sovereignty as the French nearly did. And the first reaction of combative politicians like Mr Clarke and Mr Heseltine to the fact that Labour has warmed to the idea is that it is as bad a reason for supporting a referendum as the fact that Teresa Gorman is demanding one.

All this depends on what the question would be. In her memoirs Lady Thatcher correctly summarises her position in 1990 as being that "a referendum would be necessary before there was any question of having a single currency". But what is being envisaged in some of the internal Cabinet discussions at present is rather different.

The proposition that Mr Major should make an advance commitment goes something like this: Mr Major could say that if the Cabinet decided in some future Parliament that a single currency was desirable it would not proceed to join without a referendum.

This presupposes that the referendum would arise only if and after there had been agreement within the Cabinet that a single currency was desirable. In other words, the commitment would provide a safeguard for the anti-Europeans that a momentous constitutional change would not take place without first the Cabinet coming to the conclusion that it was economically and politically desirable, and secondly that conclusion being put to the people.

But it also makes the assumption, much friendlier to the pro-Europeans, that the referendum would not occur unless the Cabinet were prepared to fight for it - and quite possibly unanimously, unlike in 1975.

In other words if what remains the pro-European majority of the Cabinet decided in favour of a single currency, the anti-European minority could still confront the choice of resigning or backing the Government's case.

It is tempting to think this may even be why Michael Portillo sounded cautious about the referendum idea in his BBC interview. But he was certainly sincere in saying it was not "his first choice''. That of course would be for the Prime Minister to say here and now he was opposed to a single currency. Which, as Mr Portillo knows, isn't about to happen. And the two "inside-right'' Euro-sceptics in the Cabinet, Michael Howard and Jonathan Aitken, have both sounded warm in public about a referendum.

The game in town, however, is much more likely to be trying to persuade Mr Clarke and Mr Heseltine that there is more to the referendum case than short-term tactical help for Mr Major. The Cabinet supporters of the idea are now joining forces to do just that.