Mandelson urges Blair to stay on as PM so he can sort out Europe

Mandelson urges Blair to stay on as PM so he can sort out Europe
By Brendan Carlin, Political Correspondent and David Rennie in Brussels

Peter Mandelson risked a new row with Gordon Brown yesterday by urging Tony Blair to stay on as Prime Minister to sort out Europe's constitutional crisis.

In an intervention that will cloud Mr Brown's hopes of a quick succession, Mr Mandelson, one of Mr Blair's closest allies and now Britain's European Commissioner, suggested the Prime Minister should continue "for the next two to three years" now that French and Dutch referendums had rejected the EU constitution.

The comments came as No 10 cold-shouldered a joint attempt by Gerhard Schröder, the German chancellor, and Jacques Chirac, the French president, to press on with the ratification of the constitutional treaty in other EU states despite the referendum results.

Following talks in Berlin between the French and German leaders, MrChirac's spokesman, Jerome Bonnafont, made clear that countries such as Britain that are planning referendums on the constitution should go ahead. "One country cannot decide on its own the fate of a treaty negotiated and signed by 25 states," he said. "Each member state must be able to express itself in its turn."

A Downing Street spokesman said: "We have set out our position and we believe that it is necessary to have a period of reflection leading up to the discussions at the Council of Ministers on June 16."

Jack Straw, the Foreign Secretary, is today expected to tell the Commons that plans for a British referendum have now been shelved.

The treaty requires ratification by all 25 EU member states to come into force and ministers privately believe that it is pointless to continue with the process.

But as Britain will next month take the presidency of the EU, Mr Straw is expected to leave open the faint possibility that the British referendum could be revived to avoid French and German accusations of killing off the constitution.

Mr Blair's former adviser on Europe, Sir Stephen Wall, said that although the French president had been damaged by his country's No vote, he could still make life difficult. "He's a lame duck but he's rather a vigorous lame duck with a bite," he said.

In particular, Mr Blair is likely to come under renewed pressure to give up Britain's annual £3 billion-a-year rebate.

Spokesmen for Mr Chirac and Mr Schröder have begun a concerted effort to shift the debate away from France's No vote, and on to Britain's multi-billion-pound "rebate" - an issue that unites all other EU governments against London.

French and German officials made clear their intention to cast Britain in the role of EU wrecker, if the UK did not offer to surrender part or all of the rebate, during talks on the next EU budget.

The Franco-German ploy was unveiled on the same day that the European Commission president, Jose Manuel Barroso, pleaded with EU governments to resist embarking on a mutual "blame game", after the No votes in France and Holland.

But Mr Barroso's message appeared not to have reached Berlin. Aides there said the Franco-German leaders regarded the surrender of the British rebate as a vital "gesture" that Mr Blair would need to offer to create the"spirit of consensus" needed to save Europe.

In a clear reference to the British rebate, a spokesman said Mr Schröder believed: "Every member state must make a gesture", and must not let theEU become dragged down by "national selfishness". The Government is sworn to defend the British rebate, if needs be by vetoing the whole EU budget. But the other 24 EU nations all want to scrap the rebate. At an EU finance ministers meeting scheduled for tomorrow, Mr Brown is expected to give a clear "hands off" signal to his European counterparts.

It had been widely thought that Mr Blair, who announced last year that he would not fight a fourth general election, would step down after Britain's referendum on the EU constitution, regardless of the result.

That vote was originally expected to take place next year.

Mr Mandelson urged the Prime Minister yesterday not to make a "precipitate decision" by declaring the entire treaty dead now. Instead, he hoped the June 16 council of ministers meeting would put the ratification process on hold till the end of they year. Mr Mandelson claimed that such a pause would give Mr Blair a "fresh calling".

"What he's got to do is help other European member states and heads government come to terms with what's happened, understand and realise how Europe's got to move to a different place if it's going to overcome that malaise about Europe that exists among the public," he told ITV1's Jonathan Dimbleby programme.

Mr Mandelson added: "I think he can help do that, so I think that he's got a great contribution to make.

"I would like them to consider whether it is better to preserve the treaty by pushing the pause button now and coming back to it at a later stage, rather than taking a precipitate decision either way," he said.

"I think that the best outcome from June 16 is that people say, 'Look, we need to reflect on this further and we're going to come back to this at the end of the year.' "