BRITAIN's bookmakers cut the odds on a Labour election victory last night, as Mr John Major lost his House of Commons majority.
In a hammer-blow to the Prime Minister, Conservative MP Sir John Gorst - protesting at the planned closure of a casualty unit at a hospital in his Hendon constituency - said the government could no longer count on his support and resigned the party whip.
And as speculation swept Westminster about the government's ability to survive until May, another Tory MP, Mr Terry Dicks, renewed his threat to resign the party whip, likening Mr Major to the helmsman on the Titanic.
It was a devastating end to a disastrous week which saw the renewal of the Tory civil war over Europe, and revealed Mr Major and Chancellor Kenneth Clarke briefing the press against each other on the issue of the Single European Currency.
Mr Major and Mr Clarke struggled to display a semblance of unity, as Tory Euro-sceptics demanded the Chancellor's head and accused the prime minister of defying the "democratic will" of the Conservative Party by refusing to abandon his wait-and-see approach to the currency issue.
Mr Major insisted Mr Clarke enjoyed his full support. Mr Clarke maintained: "I didn't threaten to resign, and I am not threatening to resign."
But yesterday's Daily Mail named Mr Major himself as the source of last Monday's Daily Telegraph report that he was preparing to rule out British membership of the currency for the lifetime of the next parliament. And the Chancellor's denial did not extend to Thursday's BBC report that he believed the story came from "someone close to the prime minister" and had likened it to "a boomerang laden with high explosives which has blown up in the prime minister's face damaging Mr Major badly in the process".
And the Conservative Party's capacity to damage itself was on full display yesterday, as Eurosceptics and Euro-enthusiasts clashed over the Chancellor's position, and the cabinet's agreed policy.
Former minister Mr Edward Leigh said the majority of MPs and ministers wanted now to rule out British participation in the currency: "We are trying to persuade the prime minister to win the general election, to go witg the mob of public opinion."
Mrs Theresa Gorman MP said Mr Leigh was right: "You could count the Euro-philes on the fingers of two hands. Apart from those in office, there's a very small group in the House who are supporters."
Mr Bill Cash said: "We've got to have a clear position in the Government, and we've got to say we are not going to have a federal Europe. We are not playing games, we are deadly serious. The Chancellor and others who feel we ought to keep our options open are profoundly wrong."
Mr Douglas Hurd, Lord Howe and Mrs Edwina Currie rallied behind the cabinet's declared position. Mrs Currie said it was appalling to suggest that "one of the best chancellors we've ever had should resign because we have a few fanatics against Europe".
But the Euro-sceptics, convinced they have the numbers, will pile the pressure on Mr Major during a two-day Commons debate before next week's European summit in Dublin
Mr Major himself will try to steady nerves with a lengthy television interview tomorrow. But his public rift with the Chancellor has emboldened those determined to press for a U-turn on the single currency, even if it means forcing Mr Clarke from the cabinet.