Prodi plan to sideline UK on finance

BRITAIN faces being sidelined in key European Union economic decision making under plans put forward by Romano Prodi. The European Commission president wants to hand over crucial powers to an informal group of finance ministers from the 12 countries which have signed up to the euro.

The move is certain to be resisted by Britain because it would give the EU greater say over levels of taxation and spending. Under present rules, Chancellor Gordon Brown can influence big decisions taken at regular meetings of all 15 member states' finance ministers. Prodi's plan would see the real decisions taken by the smaller body, not including the UK.

The proposals could also strip Britain of its place at the table in international forums such as the G8 and International Monetary Fund, where a single EU figure would represent all member states. Evidence that the Commission is seeking more power could damage Tony Blair's attempts to swing British public opinion behind the EU and the euro.

Also on the table are moves to give the EU greater say over member states' foreign policies. The new proposals were being unveiled to Euro-MPs today.

A British Treasury spokesman said: 'The Commission has only a limited role in economic policy. The question is whether there is a consensus to change this arrangement.' Government sources pointed out that other countries will also oppose the plans.