The purpose of the story was presumably not merely to destabilise the Labour Party but to put extra pressure on the Conservative government. As Parliament goes into the summer recess, the Eurosceptics are making desperate efforts to get the Government and the main opposition party to rule out Britain joining a European single currency within the lifetime of the next parliament. The Paymaster General, David Heathcoat- Amory, has resigned, so he can put the arguments against the single currency, while 50 Eurosceptic Labour MPs have produced an anti-single currency pamphlet. But it may be Davis who in the end had the shrewder reckoning of what a brick wall he was beating his head against.. By blindly sacrificing in advance the option of joining EMU, Labour risks before it is even elected the very market credibility it has so painstakingly sought to construct Labour is not going to force Major to change his mind Heathcoat-Amory is the hero of the hour on the Tory right. Yet even if Blair did not accept all the arguments set out on this page by Giles Radice, he isn't going to rule out a single currency, however tempting the short-term advantage might be.It's not simply that much of the City and industry, freed from any incentive to collaborate in the the Tories' sullen neutrality on the issue, might swing in favour if and when Labour wins the election.

It's true that some quite prominent Labour frontbenchers will tell you privately that Britain is not yet ready for a single currency. The more they are denied and Blair professes himself baffled by their provenance, the more they are intrigued. Several of these might well follow Clarke out of the Government. And further defections to the Opposition from the pro-European backbench left could not be ruled out.The one event that could change all that would be if Tony Blair decided to rule out a single currency. Right-wing Tories have shown an unhealthy fascination with last week's press hints that Blair might do just that. What's more, it is utter fantasy to suggest that a Clarke resignation would not put the Government's survival at risk. A total of 20 ministers of state have already signed up to the pro-European Conservative Mainstream, an organisation that will hear a keynote speech from Douglas Hurd at its opening conference in September.