Amsterdam Summit: Blair steers steady course over treaty

Sarah Helm reports on a late night for leaders

Tony Blair was negotiating deep into last night with European partners, working to finalise the Amsterdam Treaty, which the leaders hope will settle differences over new power-sharing.

As the talks entered their end-game, Mr Blair, attending his first formal European summit, was put to serious test as a player in the European version of multi-dimensional chess.

The outcome of last night's talks will indicate whether Mr Blair is justified in arguing that his new co-operative approach with Europe has strengthened his negotiating hand

Along with every other leader, Mr Blair was reluctant to cede powers in several areas, but was certain to have to trade off slices of British sovereignty during the course of the night.

As the evening wore on, the top priority for Britain was to block attempts by other member states, led by France and Germany, to commit the union to a common European defence in the new treaty.

Britain fears that giving the European Union powers over defence would eventually turn the union into a military, as well as a political alliance, thereby undermining the role of Nato.

Mr Blair was therefore determined last night to remove language from the draft treaty text which suggests that the Western European Union (WEU), Europe's de facto defence arm, should become gradually integrated in the EU.

However, at the eleventh hour, the Netherlands, which holds the EU presidency, raised the stakes by suggesting a protocol be attached to the new treaty detailing the three phases by which the WEU would be incorporated into EU structures.

In its fight against new defence power-sharing, Britain was counting on support from Denmark and four neutral countries - Ireland, Austria, Sweden and Finland. However, it seemed unlikely that Mr Blair would be able to neutralise the Franco-German initiative, and was likely to be forced to accept a compromise.

Britain had already secured its prime Amsterdam objective, maintaining rights over frontier controls, before last night's negotiations began.

As a price for this concession the Government ceded the right of other states to develop a joint immigration and asylum policy.

Last night Mr Blair was still attempting to limit related moves to extend the powers of the European Court to allow judges to oversee decisions on police co-operation and crime fighting. Britain was also hoping to stop moves by other member states to pool sovereignty in civil judicial policy.

British negotiators said last night they expected to "make some progress" on the European Court issue. However, other states remained determined to give a boost to the courts' role and to co-operate more widely in the judicial field.

Mr Blair's hope of securing a firm commitment from partners to curb the practice of fish-quota hopping appeared to be in some doubt, due to objections from Spain.

The highly sensitive move to introduce "flexible decision-making" into EU procedures - whereby some countries can move ahead at a faster pace than others - was another area where Mr Blair was likely to be forced to consider a trade off.

Britain has made clear that it wants the right to veto any move by other groups of countries to pool powers as a one-off group. However, it seemed unlikely that Mr Blair would be able to win partners round.

The best he could hope for was to secure agreement that the "flexibility" procedure would not be applied to certain core EU policy areas, such as the single market.

The Prime Minister, who has accepted some extension of qualified majority voting, was still hoping to reduce the list of eleven areas to which other states want the system applied.

Hammering out their consensus, the leaders were acutely aware that their treaty must be far-reaching enough to allow the EU to accommodate new members.

Failure to agree sufficient reforms of Europe's institutions and decision- making process could force member states to launch further treaty-revision.

However, the length of the final negotiations indicated just how far apart many countries were on core issues relating to re-shaping the union.