Will they count him out?

The clock is ticking. Stephen Castle and Paul Routledge on John Major's worst-ever week

As moments of parliamentary history go, it lacked the appropriate electric atmosphere. At 2.40pm on Friday just two MPs and one minister adorned the empty benches of the Commons Chamber, with not an Opposition MP in sight. Most of Westminster was deserted and even the minister's media handlers were in the Commons press bar enjoying an end-of-week drink.

Then one of the two MPs, Sir John Gorst, embarked on a course of action which was to make the Government the first minority administration since 1979, and could precipitate an early general election. After challenging the Government to honour commitments made previously to his constituents, he walked out. His closing remark, "I must take the view that the mutual obligations that exist between us are at an end", were the words the Government did not want to hear and sparked Westminster, winding down for the weekend, into life.

Perhaps this was symptomatic of the disarray which has engulfed Mr Major's premiership. For years one could imagine the Government coming to grief in a big Commons set-piece. Yet here it looked like an administration going out, not with a bang, but with a whimper.

Like most such events, there had been warning signs. Last Tuesday night Sir John - who mounted an earlier rebellion over the downgrading of a hospital in his Hendon North constituency - had been seen arguing with a minister in a Commons corridor. On Friday, agitated that earlier assurances were not being honoured, Sir John threatened publicly to abandon the party whip, a threat which was repeated by his colleague, Hugh Dykes. Another MP, Terry Dicks, was warning he might resign the whip over Europe. But if the Government had seen this coming, not for the first time, it failed to act. Within minutes Sir John had announced at a press conference that he was abandoning the party whip, depriving the Tories of their 17-year parliamentary majority.

Such a self-inflicted Tory wound was a fitting end to a week of extraordinary internal feuding, of own goals and of public Conservative blood-letting over Europe. Thirty-seven points behind in one opinion poll, divided over Europe and within a maximum of five months of an election, the Tory ship of state seems to be sinking. As one ex-minister put it: "It's like the moment when you hear the captain making reassuring announcements over the loud-speaker, but notice that the deck is actually tilting. People are eyeing the lifeboats. And all of them are heading off in different directions."

IF the fate of a north London hospital deprived the Government of its parliamentary majority, it was the future of the continent of Europe which, not for the first time, destabilised the Cabinet. It was first thing on Monday morning, on his way to a BBC radio interview in Brussels, that the Chancellor the Exchequer was given a cutting from the morning's Daily Telegraph by his press secretary, Jill Rutter. The story predicted that the Prime Minister would shift the Government's agreed policy to keep open its options on a single European currency. According to the Telegraph the Prime Minister wanted to make it clear that Britain would not participate in the first wave of monetary union.

If true, this was explosive for the pro-European Mr Clarke who, when he agreed to a referendum commitment on EMU earlier in the year, struck a deal with Mr Major that the policy would not change. Mr Clarke did not waste any time - once on the airwaves, he let rip. There would be no change of policy, he said. "It simply isn't going to happen," the Chancellor said. "It would be senseless were it to happen."

That the story grew was the result of a combination of factors. To the Westminster eye it looked authentic; the Telegraph is, after all, the Tory party's house journal and its political editor, George Jones, is a cautious figure. The source of the information, originally relayed to the editor, Charles Moore, remains opaque. John Major himself was a suspect since he has seen the Telegraph editor within the last couple of weeks - although not immediately before the leak. Other suspects included the Conservative Party chairman, Brian Mawhinney, and the Home Secretary, Michael Howard. Allies of all concerned deny authorship.

What added to media suspicions was that Downing Street was inept at killing the story. Partly this was because Mr Major was also out of the country at an international summit in Lisbon. His press secretary, Jonathan Haslam, had left with the Prime Minister at 8am and the lack of a denial from Number 10 for some time convinced many journalists that the Prime Minister's Office was rather less anxious to squash the Telegraph story than Mr Clarke was.

The following day's papers gave a lurid account of events. From his car, Mr Clarke phoned his private secretary. Rather ominously the Chancellor's private office had been evacuated because of a fire alarm and Mr Clarke's official was pacing around outside the Treasury speaking into a mobile phone.

Soon Michael Heseltine, the deputy prime minister, had come to the Chancellor's rescue, giving rise to the widespread view that a new axis between the Chancellor and Mr Heseltine was really running government. At lunchtime the deputy prime minister was on the radio, giving an interview which turned out to fan, rather than dampen, the political flames. Pressed on The World at One, the deputy prime minister insisted: "We are not going to change our position in the election or in this Parliament". At Prime Minister's Questions that afternoon a grim-faced Mr Major was forced to lock himself into the agreed position, after being asked by Tony Blair, Leader of the Opposition, to endorse Mr Heseltine's statements. By this time Mr Clarke had spoken to the Prime Minister, but only to exchange pleasantries.

The Chancellor was later forced to deny rumours that he had threatened to resign but no such conversation took place. However, in one sense, such a dialogue does not need to happen since the Chancellor's willingness to resign if necessary is doubted by few. What the Chancellor really thought was to emerge through a combination of the Chancellor's indiscretion and the Government's bad luck. On Wednesday Mr Clarke held a long-standing lunch engagement with two BBC political journalists, Jon Sopel and Mark Mardell. Over the wine Mr Clarke relaxed in the plush surroundings of the Park Lane restaurant Nico at 90. But by chance Frank Dobson, the Labour environment spokesman, was lunching at the same restaurant with the BBC political editor, Robin Oakley. The following day Mr Sopel reported that Mr Clarke "has told friends" (a journalistic term used to distance a reporter from a source) that the Telegraph story "was a boomerang laden with high explosives which has blown up in the Prime Minister's face damaging Mr Major badly in the process". Mr Sopel recounted an earlier brush between Mr Clarke and Mr Mawhinney in which the Chancellor had attacked Conservative Central Office staff whom he believed to have briefed against him. Mr Clarke, the BBC reported, "complained to Brian Mawhinney: 'Tell your kids to get their scooters off my lawn'". A delighted Mr Dobson was able to blow the gaffe on the source of this news item.

Although Mr Clarke is renowned for his plain-speaking, this frankness even took some of his allies aback. "He seems," said one leftish Tory MP, "to be on a bit of an adrenalin rush." But the Sopel lunch provided conclusive proof of the fragility of Mr Major's Cabinet. There were well- founded suspicions that allies of the Prime Minister were briefing against the Chancellor's European policy. There was evidence that the Chancellor believed he was being briefed against, both by the party chairman and the Prime Minister. And there was even more direct proof that Mr Clarke was willing to give as good as he got, condemning both his colleagues in private. Little wonder MPs compared the ruckus to the rows between Margaret Thatcher and her Chancellor, Nigel Lawson.

Nor is the spleen restricted to the Cabinet. Last Thursday's meeting of the backbench 1922 Committee revealed the depth of disaffection over the European policy. Sir Peter Tapsell, a Euro-sceptic grandee, described EMU as the greatest threat to British democracy for a thousand years. Even Tim Yeo, a pragmatic pro-European ex-minister, called for the ruling out of early entry into the single currency on economic grounds because of the danger of a "fudged" currency pact. Conservative MPs who left Committee Room 14 to attend the meeting of the Positive European Group in 18 described the 1922 as the worst meeting of their careers. Edward Leigh, the Euro- sceptic ex-minister, called publicly for the policy to be changed. Tony Marlow, the maverick backbencher, argued on television that the Chancellor should be sacked.

One Cabinet loyalist argued that the situation would improve when MPs returned from the Christmas break and focused on the coming election. That argument, however, repels the current logic of the Tory party. Most of those now arguing for a change in policy do so because of the imminence of the election and because of their view that playing the union jack card ("the party that will save the pound") is the last shot in the locker. The Clarke/Heseltine theory that steady economic growth and rising living standards can deliver another Tory victory looks implausible after last week's Gallup poll showed the party falling 10 points further behind Labour since early November.

As the political position deteriorates, so the sceptics turn up the pressure for a more populist policy on Europe. But as last week demonstrated, such a tightening of Tory policy is almost certain to be counter-productive. Allies of Mr Clarke are in little doubt that he would resign, causing a potentially fatal crisis for the Government. Mr Heseltine - who would be in a pivotal position - would be under pressure to quit as well. He too might feel that, having made specific commitments in public, his position would be untenable. Other ministers, John Gummer in the Cabinet, David Curry, Ian Taylor and Alistair Burt outside, might leave the Government in protest. At the same time, up to two dozen backbench MPs would feel unable to support the new position and might threaten to resign the whip and stand as independent conservatives. For a section of the party, the stance over the single currency has become a line in the sand, a symbol that it will no longer be forced to dance a Euro-sceptic tune, which will lead to a fully fledged anti-European position.

What remains to play for is a sceptic push to shift the policy along the lines that Mr Yeo argued, and to pressure Mr Major into declaring dissatisfaction with the preparations for EMU. It is being led by Mr Howard, who sought unsuccessfully to raise the issue at Cabinet last Thursday. This week backbenchers will pile in behind it in a Commons debate on Europe.

But does its worst week in recent memory hasten the Government's demise? The Labour administration of 1974-79 was defeated in the Commons 42 times before all the opposition MPs combined to bring down the Prime Minister, James Callaghan, on a vote of confidence. Mr Major still seems to have the backing of the Ulster Unionists. But he now has to contend with a likely Labour guerrilla campaign against his legislative programme, probably including the Finance Bill. He faces acute difficulties revolving around his loss of a Commons majority. This weekend Labour MPs are poring over the implications of Sir John's decision. John McWilliam, pipe-smoking Labour MP for Blaydon and a member of the Commons Chairmen's Panel argued that the composition of the floor of the Commons must be reflected in the make-up of the committees, on which the Government has an inbuilt majority. No majority in the House, no majority on the committees, he argues.

The conflict could flare up onWednesday, at the meeting of the Selection Committee, chaired by Sir Fergus Montgomery. This body is due to choose the 40 or so members of the Standing Committee responsible for processing the Finance Bill. Without a majority on the Finance Bill Committee, the Government could lose its Budget. And a government that cannot pass tax legislation cannot govern.

Labour will claim that the Selection Committee must be revamped to reflect the changed political situation. The Tories will counter-claim that nothing has really changed because Sir John has not technically resigned the whip. He may have walked away from the party's disciplinary machinery but he has not crossed the floor, and might still vote with the Government, if he so chooses. Sir John, however, is a fully paid-up member of the awkward squad, having - in his confession to Andrew Roth's Parliamentary Profiles - been "socialist inclined" at school, a pro-Liberal at Cambridge and originally turned down by Tory Central Office as a candidate "because I'd never done anything to prove I was a Conservative." On Friday he refused to answer the question of whether he would vote for the Government in a motion of confidence. For the Tory whips to claim he is still "one of us" might ring false.

Nor does the momentum end with his defection. The day after the Selection Committee meets, the parliamentary arithmetic will change again. Jeff Ennis, a primary-school teacher from Grimethorpe, will - barring psephological miracles - be elected Labour MP for the constituency of Barnsley East.

Before the shock defection, Donald Dewar, Labour's Chief Whip and his deputy, Nick Brown, were ruminating on what to do when Labour wins the by-election. Their calculation of the parliamentary arithmetic was a dead heat. They planned to force talks through "the normal channels" at Westminster to challenge Tory hegemony on the key committees. Behind this assessment is a further consideration : Wirral South. A by-election has been pending in this north-western seat since the death of the Conservative incumbent, Barry Porter, last month. Parliamentary convention decrees that the poll be held within three months, but the Government shows no sign of risking an election that it would almost certainly lose, consigning its majority to the dustbin.

This, of course, does not necessarily spell the premature end of Mr Major's government, although the odds on an early election must now increase. Perhaps what really disappeared last week amid all the feuding was the party's famed thirst for power almost at any price. Last week a group of solid, middle-of-the-road Conservative MPs dined together in the Commons dining room and reflected on their party's current travails. "The consensus," said one, "was that this has finally proved that we cannot win the next election."

And that new fragility means that any unexpected issue - even the downgrading of a north London hospital - might now spell the end of Mr Major's six years in power.