Act of public defiance leaves the Tories in disarray

"BERMUDA Triangle... it makes people disappear

"BERMUDA Triangle ... it makes people disappear." Tory Euro sceptics this week have been wishing a similar fate on Chancellor Kenneth Clarke.

Mr Major's cigar smoking, jazz loving Chancellor flew off to Bermuda for a finance meeting on Tuesday, leaving behind a party once more in Euro turmoil - his Prime Minister royally cheesed off, the right demanding his head and the left fearing they might get it.

The cause of the furore was Mr Clarke's breach (and a clear breach it surely was) of the cabinet's agreed line on the single European currency. Emboldened by Saturday's EU finance meeting in Dublin, and challenged by Lord Tebbit's suggestion that Mr Major could lose a chancellor and win the election - Mr Clarke said it would be "pathetic" if the British couldn't make up their minds and then joined late.

The cabinet line is rooted in Mr Major's Maastricht opt out: the cabinet will decide when the time is right, and any decision to join will be put to the people in a referendum.

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The Chancellor's enthusiasm for monetary union has never been in doubt. And his act of public defiance was strategically: timed, coming hard on the heels of the Tory grandees's attack on. the party's "Little Englanders". Tory Europhiles fear the right plan a conference coup, forcing Mr Major to rule out joining the currency at least for the life of the next parliament.

Thus the stage was set for the renewal of the party's civil war. And while Mr Major fumed about Mr Clarke, the full destructive potential was revealed when a junior Foreign Office minister broke ranks and accused the Chancellor of being "out of step". Downing Street was forced to act. Mr Clarke, sources intoned, had been misrepresented. Sir Nicholas Bonsor had mistakenly responded to those mistaken accounts. The policy was clear and all ministers were required to support it.

The whole thing - you've guessed it - had been got up by the press. Predictably determined not to let a good row die down, the press yesterday had little difficulty decoding. The "rebuke" to Sir Nicholas had been distinctly mild and the Chancellor was left "embarrassingly exposed".

From Brighton, Mr Paddy Ashdown mocked Mr Major - telling him to stop undermining his Chancellor in private, and to come out publicly in his defence. The government, he cheerfully declared, was at war with itself over Europe. And white the country may be little enamoured of the Liberal Democrat agenda for higher tax and spending, it will have recognised the simple truth of that.

It is enough to drive the party managers spare. There they were preparing for the party conference in two weeks' time, harbouring daft thoughts about a united party launching itself in good heart for the electoral battle to come. The Prime Minister of course, has to continue to believe he can win another term. But Central Office strategists, too, could be forgiven for thinking it not altogether impossible. Certainly there are good grounds for believing the race will be a lot closer than the opinion polls suggest. And a battery of excellent economic indicators, recovery in the ho using market and possible tax cuts apart - the Tories have much to play with.

Mr Tony Blair has not enjoyed a great summer, and may yet face a truculent conference next week. Ironically, indeed, a peaceful week in Blackpool may be guaranteed only courtesy of trade help. The tensions between "New Labour" and its TUC "parent" - and the distrust between socialists and modernisers - may be subordinated to the pursuit of electoral victory. But they should be fertile ground for the Tories. Likewise Mr Blair's U turn on Scottish devolution.

The Scots Nats appear the main beneficiaries, while the Welsh are threatening to campaign against Labour's more limited plans for Cardiff. Try as he might this week in Brighton, Mr Ashdown cannot conceal that forcing the Tories out, and winning influence - if not seats - in a Blair government is the name of his game. Dr Mawhinney knows how to hammer home the message that the Lib Dems are not a safe repository for disillusioned Tory voters.

The Prime Minister and party chairman can identify the makings of a good campaign. They know how to carry the battle to the opposition. But they seem powerless to prevent the enemy on their own side doing their worst.

On the evidence of this week, many of the combatants prefer the European battle to the prospect of a fifth Tory term. And, in truth, some are encouraged by the belief that that prize is already beyond them. As one Conservative MP put it earlier this week: "We're going to lose. The Labour party is going to come out in favour of the single currency after the general election. We, in turn, will become excessively nationalistic and Euro phobic. But too late."