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Last Updated: Tuesday, 25 November, 2003, 16:36 GMT
UK 'could veto EU constitution'
European flags flapping at European Commission
Crucial talks on the EU take place this week
Britain might not reach an agreement with its European Union partners about a new constitution, the government has indicated.

It signalled it was ready to veto the idea unless it gets its way on issues like tax, defence and social security.

A senior government source said that while the constitution was "highly desirable" it was not essential.

BBC political editor Andrew Marr said the apparent change in direction was "a classic case of pre-negotiation hype".

The suggestion was made as EU foreign ministers prepared to meet for talks in Brussels later this week.

Bluff and brinkmanship

The aim of the Brussels meeting is to finalise the constitution - and comes ahead of a summit of all EU leaders next month.

But the source said that if necessary Europe could function with the voting procedures agreed in the Nice treaty three years ago.

What we are seeing at the moment is more smoke and mirrors
Michael Ancram
Shadow foreign secretary

Other so-called "red-line" issues the government insists it is prepared to stand firm over include foreign policy.

Shadow foreign secretary Michael Ancram - who has argued that EU expansion was not dependent on a new constitution - accused the government of posturing.

He said the fact the government was relying on tip-offs from anonymous sources rather than making an open statement suggested its latest pronouncements on the proposed EU constitution were more about "smoke and mirrors" than any change of direction.

Every proposed regulation should be put to the costs test, then the jobs test and then the 'is it really necessary' test
Gordon Brown

Chancellor Gordon Brown has also been talking tough on Europe.

He said: "We need an open, reforming, flexible Europe, changing to meet the global economic realities it faces.

"We are making clear in these discussions that we are standing up for British interests.

"We have red lines and we are insisting on unanimity for tax, social security and defence."

Lib Dem foreign affairs spokesman Menzies Campbell said there should be a full statement to MPs to clarify the government's position.

"An issue of this kind should not dribble out of Whitehall but be the subject of a full statement to the House of Commons," he said.

On Monday night Mr Brown told business leaders that Brussels red-tape was holding back business.

Calling on EU finance ministers to sweep away unnecessary rules, Mr Brown said: "Every proposed regulation should be put to the costs test, then the jobs test and then the 'is it really necessary' test.

"Existing regulations should be put to the same tests."

'More efficient'

Mr Brown urged the EU to develop a strong economic partnership with the United States.

He said it should not become an inward-looking regional trade block.

The chancellor said the EU must be ready to embrace reform

"Europe will only maximise the benefits of globalisation - and solve its problems of low growth and high unemployment - by becoming more efficient and increasing its productivity," he said.

The BBC's John Andrew
"There may be an element of bluff and brinkmanship here ahead of the summit"

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