MR John Major's European policy was in chaos last night as cabinet tensions over the single currency exploded in a damaging pre election row.
His Chancellor and Foreign Secretary publicly contradicted each other, after Mr Malcolm Rifkind said the government was "hostile" to the single currency. During an interview on the BBC's Today programme, Mr Rifkind was asked if the government remained "neutral" pending a decision on whether to join. Mr Rifkind replied: "No, we are not neutral. We are actually ... on balance, we are hostile to a single currency. But we accept that you have to think very carefully about these matters before you rule it out completely".
The Chancellor, Mr Kenneth Clarke, reacted swiftly, telling reporters that Mr Rifkind had made "a slip of the tongue under pressure from a very skilful interviewer."
But Mr Rifkind's remarks were gleefully seized by Tory Eurosceptics as a significant further hardening of Mr Major's position. Former leadership challenger Mr John Redwood said the Foreign Secretary's hostility to the monetary project contained in the Maastricht Treaty "has to be seen as a shift".
And as 10 Downing Street insisted there was no change in government policy, an unrepentant Foreign Secretary arrived in Bonn to declare: "I said on balance that there is a lot of scepticism in Britain about a single currency, but that we have not yet made a final decision.
He insisted he did not regret what he had said on the BBC, was happy with the subsequent statements made by Mr Clarke and Mr Major, and insisted there was no change in the government's "wait and see" policy.
Mr Rifkind said cabinet policy was against joining EMU in 1999 because the convergence criteria were likely to be "fudged." Asked about the use of the word "hostile" to describe the government's disposition, he replied: "I don't regret it because in the context in which I was using it made sense, and was consistent with what the government's policy is."
Affirming that Britain was "highly unlikely" to join the currency in the so called "first wave" Mr Rifkind insisted he had used the word "hostile" to describe the government's attitude to joining in January 1999. "If other people prefer some other word I am quite happy about that. But it's basically the policy we have outlined, and I am entirely content with what the Chancellor said this morning," he said.
But at Westminster this explanation arrived too late and appeared wholly unconvincing. The Chancellor had actually been crushing in his suggestion that the Foreign Secretary had wilted under pressure from an interviewer. His own insistence that the government "doesn't have a hostile attitude to the single currency" and would "keep an option open" confirmed again his own enthusiasm for the single currency.
Mr Major, meanwhile, had to counter journalists' questions by insisting he hadn't heard Mr Clarke's comment about Mr Rifkind. On the issue itself, the Prime Minister said: "The balance is that we at present have sterling. People will have to show to us that it will be positively beneficial to change." And on screen, and off, there followed inevitable speculation that Mr Rifkind's statement was part of his deliberate repositioning on the European issue, with an eye to a future contest for the leadership of the Tory party.
The Liberal Democrats European spokesman, Mr Charles Kennedy, said Mr Rifkind's comments and his Bonn speech meant the "UK voice is confused, contradictory and counter productive". And the Labour leader, Mr Tony Blair, waded in, declaring: "We have had three different statements from the three most senior people in the government between the Today programme and The World At One."
Mr Blair said: "It is a quite extraordinary situation. The Conservative Party cannot offer leadership and all this is tied up with their internal divisions and the future leadership contest, and nothing to do with the interests of the country."
Tory Euro sceptics, meanwhile, saw the whole affair as further proof that they are winning the party's European battle.