Modern  British political history has witnessed a recurring pantomime that has seen most of the leading actors departing the political stage earlier than they had anticipated, writes Chris Johns.

The cause of these disrupted careers has been tension - occasionally erupting into warfare - between the prime minister and his (or her) chancellor of the exchequer. Margaret Thatcher's fall from grace had its roots in a dispute with Nigel Lawson over, among other things, his desire to get involved with Europe's exchange rate mechanism.

John Major fell out with Norman Lamont with each man blaming the other for sterling's ignominious exit from that same exchange rate mechanism. The fall-out from that debacle eventually cost both men their jobs.

Today, it is often argued that another dispute over exchange rate arrangements with Europe will eventually lead to divorce between Tony Blair and his Chancellor, Gordon Brown. The career of either man could easily end up being shattered by the European question.

The British Prime Minister is reported to have been pleased by the latest classic European compromise reached by the German and French governments over the constitutional future of Europe. This latest euro-fudge involves the creation of two European presidents.

I want to resist pushing the pantomime metaphor further, although it is tempting to wonder whether Europe is creating a horse or a cow (most likely, all things CAP considered) and who will play the front and back ends?

It is hard to know why the British government is so pleased by this development. Perhaps it is because the arch-federalists like Germany's Joshka Fischer have been so disappointed. Alternatively, it could be that Tony Blair now sees two potential vacancies containing the title "president". His ambition for further high office after his current tenure is well known, as is his europhilia.

Being both ambitious and reasonably intelligent, he must know that the British electorate is now starting to lose patience with him and only the lack of a credible opposition stands between him and his worst nightmare: a serious slide in his personal opinion poll ratings.

It will not have escaped his attention that his close friend George Bush's poll ratings have also started to slide. The US media this week ran a wonderful story about how an Iowa steelworker compares Mr Bush with Bill Clinton: "I trust Bush with my daughter but Clinton with my job."

The US economy has recently lost a lot of momentum with employment, in particular, dropping. If the UK economy now starts to slide, Mr Blair's poll ratings will go the same way as Mr Bush's, no matter how ineffective the Tories are as an opposition.

Mr Blair is likely to be squeezed on two fronts. If the economy is one, the other is his return to tax-and-spend policies so beloved of past Labour governments.

It used to be said that Britain wanted European levels of public provision but US-style taxation. The difficulty facing any government is that the two goals are mutually exclusive.

Mr Blair and Mr Brown spent their first term of office reinforcing the Thatcherite legacy of low taxes and a run-down health and education system.

They have now reversed course and are raising taxes in an attempt to improve public services. But here is the rub. All of the early signs are that the end result will be European levels of taxation and US-style public services. Taxes have been rising and will increase substantially again, in April.

And all the signs are that there are plenty more in the pipeline. Mr Blair and Mr Brown are spending like crazy but nobody has a clue where the money is going.

Is Tony Blair intelligent enough to realise all of this and that a relatively early departure from 10 Downing Street might be his bet, particularly if he wants to end up as president of Europe?

The late Roy Jenkins once described Blair as possessing a "second-rate mind". From his lofty perspective that was probably true but Mr Blair is streetwise, if nothing else. Being rejected by the British electorate ultimately did Neil Kinnock a lot of good and he now enjoys a relatively high-profile position in Brussels.

If Tony Blair wants to follow his example what better way to demonstrate his pro-Europe credentials than to go down in a gallant but doomed attempt to persuade the British electorate to vote Yes in a euro referendum later this year? That may be the end of his British political career but the start of his European presidency campaign.

Chris Johns is chief strategist with ABN AMRO Securities, London. All opinions expressed are entirely personal.