THE TORY high command was again on the defensive last night forced to close ranks against reports of a widening gulf between the Prime Minister and the Chancellor of the Exchequer over the European Single Currency.
Mr John Major moved to kill speculation that he is about to abandon his "wait and see" approach to the currency - knowing that such a policy U-turn would almost certainly force Mr Kenneth Clarke's resignation from the cabinet.
The prime minister made his move as the chancellor reported to MPs "copper-bottomed" guarantees that preparations for EMU, agreed at the ECOFIN meeting in Brussels on Monday, did not prejudice Britain's "opt out".
The chancellor said decisions made were subject to Britain's "parliamentary reserve" - which would be printed on the cover of any documents presented at next week's Dublin EU summit. And he forecast that final agreement on binding legislation on monetary union was unlikely before the EU Council in Amsterdam in June next year, at the earliest.
Responding to a wave of newspaper reports yesterday, Mr Major said: "The government set out its position some time ago. It set it out perfectly clearly. Nothing has changed except speculation." And Mr Major said claims that he was preparing to rule out British membership during the first wave of EMU "deserve the Booker Prize for fiction".
Under Labour pressure in the House of Commons, Mr Major later ruled out a policy change in the course of the general election campaign.
Seeking to exploit continuing Tory divisions, Mr Tony Blair challenged Mr Major: "Will you say clearly and without any qualification that your statement of April 3rd on behalf of the government, that at the next election you will not rule out the option of joining a single currency in the next parliament, remains unequivocally the position of the government?"
To a chorus of cheers and jeers, Mr Major replied: "That remains unequivocally the position of the government."
Giving Mr Major credit for this clear reply, Mr Blair persisted: "Can you just give us another clear reply and tidy up one small loose end. Will you also say whether you agree with the statement of Mr Michael Heseltine...when he said of that position, `we are not going to change our position in the election campaign or in this parliament'?"
In reply, Mr Major said: "Mr Heseltine has said that. That is our position."
Tory Euro-sceptics last night appeared resigned to that government position. However speculation and rumour persist at Westminster that senior Euro-sceptical ministers - now believed to be a majority in cabinet - may make one final push early in the New Year to change policy, and rule out British membership for the lifetime of the next parliament.