Fury as Byers leaks euro plan

STEPHEN BYERS is in fresh trouble today after he was 'outed' by a Labour MP over his bombshell remarks on the euro. Backbencher Ian Davidson, an ally of the Chancellor and one of the founders of a Labour anti-euro group, identified the Transport Secretary as the person responsible for off-the-record comments on the Government's plans for a referendum.

It plunged the party into fresh internal strife over the currency and allowed the Tories to claim it was now Labour that was damagingly split on the issue.

Byers set alarm bells ringing over salmon and mashed swede as he chatted to political journalists. Already facing accusations of lying to MPs and the public over the 'resignation' of his Press chief Martin Sixsmith, Byers landed himself in still more hot water at a lunch in a Westminster restaurant.

As around 25 female lobby correspondents tucked into their main course Byers, one of the Cabinet's strongest supporters of the euro, appeared to take his cue from Tony Blair's declaration in a BBC TV interview that he would not mind being seen as the Prime Minister who ditched the pound. Byers went still further by telling reporters that ministers would bring forward a Bill paving the way for a landmark referendum next year.

He said this autumn's Queen's Speech, outlining planned legislation for the following parliamentary session, would not explicitly refer to the Bill but would include, as usual, a reference to 'other measures'. Byers said that journalists would be privately briefed the same day that these measures would include a Bill to set up a vote. A referendum could then be expected next year.

The key remarks were made to a small number of reporters, but word quickly spread through the room of the significance of what Byers had said. Those present tried and failed to get him to repeat his comments in an on-the-record section of the lunch engagement.

Byers then spent a few hours desperately hoping the lid could be kept on the row as rumours swept Westminster that an unnamed minister had blown the gaffe on the euro. But he was 'outed' by Davidson, and soon everybody knew that he had shattered the convention that ministers do not brief in advance on the contents of the Queen's Speech.

This forced Downing Street into an urgent damage-limitation exercise with a spokesman slapping down Byers. No10 said the comments were 'complete nonsense' and reinforced the Government's official line - that any move towards a referendum would only be met when five key economic tests had been met.

Tory party leader Iain Duncan Smith ordered the Prime Minister to stop 'playing games' over the euro and told him: 'Come clean - or shut up.' Liberal Democrat foreign affairs spokesman Menzies Campbell claimed: 'Stephen Byers has been caught out once again - but this time for telling the truth.'

Chancellor Gordon Brown was said to have been infuriated by Byers' remarks. In the past, Brown has allowed his aides to deliver brutal slap downs to ministers who have stepped out of line on the policy. The Treasury must complete its assessment of the economic tests by June 2003, but most now expect it to do so well before then.

Pound dives on referendum talk

Why are so many countries already sick of the euro?