THE Conservative Party's divisions over Europe were reignited yesterday following the resignation of the Treasury Minister, Mr David Heathcoat Amory, in order to campaign against the government's European policy which "is not working".
Mr Heathcoat Amory (47), who was the Paymaster General, is the first government minister to resign over the single currency and his departure has prompted fellow Euro sceptics to intensify their campaign to force the British Prime Minister to rule out any form of monetary union in the next parliament.
In his resignation letter to the Prime Minister, Mr Heathcoat Amory bluntly stated that Britain's entry into a single currency would be "disastrous, both politically and economically", instead it was "essential" that the government negotiated a new relationship with Europe.
After describing Mr Heathcoat Amory's decision as a "mistake", Mr Major replied that he understood the "passions aroused" by the single currency but added, "I do not believe it is in Britain's interests to exclude ourselves from the debate."
Lord Tebbit, the former Tory party chairman and a hard line Euro sceptic, described Mr Heathcoat Amory's resignation as "highly significant" particularly as he had always been a loyal supporter of Mr Major.
"As deputy chief whip during the passage of the Maastricht Bill, at the Foreign Office involved in the European affairs and at the Treasury responsible for policy on the single currency, few ministers have had a better chance to understand and assess these issues. His resignation is therefore highly significant. No doubt it reflects his frustration that although his views are shared by most of the cabinet, a small group of ministers are blocking them," he said.
Although Tory party whips spent a frantic weekend trying to persuade Mr Heathcoat Amory to reconsider his decision and offering him promotion, it was all to no avail. Such was his determination to leave the government, Mr Heathcoat Amory had already written a pamphlet arguing why Britain should never join a single currency, which is due to be published today.
Many Tories now fear that issue will split the party, with his resignation underlining the "deep" divisions among Tories over Europe.
The deputy Prime Minister, Mr Michael Heseltine, who is pro Europe, said he has was "sorry" to hear of Mr Heathcoat Amory's decision.
The timing of Mr Heathcoat Amory's decision is a blow to Mr Major's recent plea for party unity in the run up to the general election and also forced him to postpone his summer reshuffle of junior ministers until today.
Tory central office had hoped to score political points over the Labour party's internal divisions this week with Mr Blair trying to prevent the left wing unseat his shadow health secretary, Ms Harriet Harman, in the shadow cabinet elections tomorrow.
Instead, Tory officials are concentrating their efforts on an intensive damage limitation exercise.