Small nations alarmed by Giscard's EU reforms

Architects of a new constitution for the European Union meet for a make-or-break debate today as they try to overcome deep divisions over plans to revamp Europe's creaking institutions.

Battle lines are being drawn before the two-day meeting in Brussels, with large nations pitted against small and the EU's minnows alarmed that proposals from the former French president Valéry Giscard d'Estaing will tighten the grip of the big states. The idea of creating a permanent president for the European Council, where EU leaders meet, has caused a split and provoked a confrontation between M. Giscard and the European Commission president, Romano Prodi.

The 105 members of the convention, made up of politicians of all persuasions from EU countries and those about to join, have tabled 1,600 amendments to M. Giscard's text, 700 of them on the crunch questions of what role the EU's institutions should play.

Britain, which accepts most of the proposed changes, is digging in over plans to reform defence and foreign policy, create an "EU foreign minister" and incorporate into EU law a charter setting out fundamental rights for EU citizens.

Most of the convention's members agree on the need to change the EU's sclerotic decision-making machinery before 10 more states join next year. But this unique EU experiment now faces its moment of truth: whether it can unite to present an agreed text so that EU leaders – who have the final say – feel bound to accept it with minimal change.

M. Giscard is to hand over his findings to Europe's heads of government at a summit in five weeks. The convention will not be asked to vote and M. Giscard will be able to declare a "consensus" decision. His team has gone out of its way to avoid defining this consensus.

Perhaps the clearest splits are between large and small nations, with the former camp – Britain, France, Spain, Italy and (to an extent) Germany – backing M. Giscard's proposal for a president of the European Council. This would replace, in part, the current system under which the EU's presidency is rotated every six months.

Small nations and the European Commission oppose this, arguing that the Council presidency would set itself up in opposition to the Commission. Andrew Duff, a Liberal Democrat MEP and member of the convention, said: "A majority will oppose the idea of a full-time president of the European Council – that has provoked tremendous opposition."

In general, small countries want to boost the powers of the Commission as a bulwark against big countries. Many want a more powerful Commission president with greater legitimacy being elected by MEPs (M. Giscard's proposals do not go this far), and to maintain the influence of the European Parliament. Small countries worry most about plans to slim the European Commission and deny states the automatic right to send a commissioner to Brussels.

The convention has become a hot issue as the Tories have taken up calls by Eurosceptic newspapers for a referendum. A clash between Tony Blair and Iain Duncan Smith dominated Prime Minister's Question Time yesterday. The Conservative leader urged Mr Blair to "trust the people" by calling a referendum on the proposals.

Mr Blair rejected the call, dismissing as "scaremongering" claims that Britain would have to surrender control of key policy decisions to the EU under the new blueprint. Britain opposes plans to call a new external relations supremo the EU's "foreign minister" and make the holder a European Commissioner.

Can a deal be struck? One theory is that a final compromise will keep plans for a Council president while conceding the right of small nations to keep their commissioner. Small nations may regret such a deal, though, because a large Commission is unlikely to be a strong one.

* Jack Straw, the Foreign Secretary, and Roger Liddle, Tony Blair's senor policy adviser on Europe, were involved in a spat last night about tactics over the European Convention. A leaked memo of Mr Liddle's accuses the Foreign Office of submitting a series of "politically ill-advised ... fulminations" on the reforms.