Helen Liddell in the Press

Liddell's remarks fuel euro row

MICHAEL SETTLE and MURRAY RITCHIE

At the eye of the storm was Trade Minister Helen Liddell and her comments to a German newspaper about the Government's approach to the single currency. Ms Liddell insisted her remarks had been taken out of context and the row was a "fuss about nothing".

"I was not suggesting that there would be a more rapid move towards a referendum (on the euro). I think there is a degree of mischief-making going on," she insisted.

However, the editor of Berliner Zeitung told The Herald: "We were told by the (British) Embassy that they had no problem with the German version of the interview. This is the version which appeared in our paper."

Later, Downing Street released an official Embassy transcript in a bid to kill off the row. Yet all it did was revive it.

The key section had Ms Liddell saying: "Well I can't say how long it will take to ensure that Britain meets the five economic tests the Chancellor has set but we certainly envisage a very early referendum."

She noted that if there were a yes vote in the referendum, it would then be a question of how long it took to bring in the euro notes and coins but that Britain could learn from the experience of other EU countries.

She was asked: "So it could be then that it could be faster?" She replied: "It could be."

The strict formula all Ministers are required to adhere to is that Government policy is for a referendum "early in the next Parliament". On an issue over which minutiae are precisely studied, by adding the word "very" Ms Liddell laid herself open to charges she was among a group of Ministers trying to force the issue.

Foreign Secretary Robin Cook came to her aid, accusing the media of turning the issue into "a soap opera".

Number 10 moved swiftly to downplay the controversy, insisting Ms Liddell was simply restating Government policy. The Prime Minister's official spokesman assured reporters: "There is no great smoking gun." Somewhat exasperated, he added: "The policy is the policy. It's settled. I know you want to see divisions and rifts where they simply don't exist."

But the Opposition scented blood. The SNP's Shadow Finance Minister, Andrew Wilson, commented: "One minute British diplomats are confirming the German language version of her comments is accurate and the next minute she is denying it. Scotland is being short-changed by people who claim to represent us in Europe."

Meanwhile, Mr Cook, addressing businessmen in Japan, repeated sentences he had left out of a Commons speech earlier this month, after being reminded by Downing Street of a Gordon Brown speech on the euro the same day.

He said: "Britain must not lose out by staying out . . . if the economic conditions are met, then it would be right in principle for Britain to join and wrong in principle to stay out."

Last night, Mr Blair at a private dinner with Mr Shroeder was due to raise President Jacques Chirac's comments about the need for a "pioneering group" of nations to forge ahead in Europe. The PM's official spokesman insisted the UK Government was firmly against a "first and second division Europe".

But Tory leader William Hague accused it of being "in a panic" and that Mr Blair had "lost control of events in Europe rather like he has at home".

Today, the Prime Minister will talk in Tubingen near Stuttgart about "values and community in the context of globalisation".

- June 30