Giscard's eurozone plan 'threat to UK influence'

Britain could see its influence over key economic decisions taken by the European Union dramatically curbed under the proposed new constitution, it emerged today.

The body charged with drawing up the document, under former French president ValȲy Giscard d'Estaing, is studying a plea for more economic power from the 12 eurozone countries.

Led by France and Germany, they have tabled a four-point plan which would give them exclusive voting rights on issues such as budgetary co-ordination and the operation of the EU's stability pact.

If approved, such a move would be a big blow for Chancellor Gordon Brown, who has claimed that all EU members should have an equal say in economic decision-making.

Supporters of the move to join the euro will seize on the revelations, claiming that Britain's influence is in danger of being watered down further if the country fails to have a referendum on ditching the pound.

M Giscard is to consider the plan when his inner team meets today at the start of a three-day private session to come up with the first draft of a European constitution. His drafts have to be approved unanimously by individual member states at an intergovernmental conference later this year, and it is here that Britain could hit back against the eurozone countries.

The Treasury indicated today that any plan to increase the influence of the eurozone countries at the expense of Britain and other non-euro countries could be blocked.

The proposals give the 12 eurozone states sweeping powers to police the complex economic arrangements under which both the currency, and the wider EU area, operates. They reawaken fears of a "two-speed" Europe with powerful countries such as Germany and France setting the agenda and Britain, outside the euro, left in the slow lane.

Mr Brown has in the past fought hard against any loss of influence for the UK over economic decision-making.