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Euro referendum 'rigged' - Tories

Under plans put forward by the home secretary, an umbrella group on each side of the argument plus every political party with more than two MPs would each be allowed to spend up to £5m in future referendums.

As all the Westminster parties other than the Conservatives support joining the single currency at a later date, the Tories are worried this would leave the anti-euro camp at a significant disadvantage in fighting a referendum campaign.

Assuming the Liberal Democrats, the SNP, Plaid Cymru, Labour and an umbrella group all gave the full amount, the pro-euro campaign could spend up to £25m.

Funding for the anti-euro drive would be restricted to £5m from the Conservatives and the umbrella organisation, the Tories say.

Pressure groups other than the two designated umbrella groups and parties with fewer than two MPs would be restricted to spending £500,000 in referendums, under the draft bill on political funding published on Tuesday.

Shadow Home Secretary Ann Widdecombe accused the government of "rigging the rules on funding in favour of his campaign to scrap the pound".

She said: "Under these new rules, a Labour-led coalition to scrap the pound would be able to outspend the Conservatives by a factor of four.

"Blair's disregard for the views of the British people is quite astonishing. It is clear that most do not want to scrap the pound.

"By setting down in law rules that will obviously give the campaign to scrap the pound an unfair advantage, Tony Blair is seeking to draw Britain into the euro by stealth."

The government has promised to hold a referendum on joining the single currency when it judges the UK economy has met the tests it has set down for adopting the euro.

The Home Office said the rules it put forward for consultation on political funding were intended for all future referendums and not just the one on the euro.

"That's a political point and not really one that I can answer," a spokeswoman said

"I suppose the argument would be that in a different referendum she might be the side that would have more funding than the other."

But Business for Sterling chief executive Nick Herbert said: "The general point we've been making is that the real imbalance of funding is between ourselves and the government and the European Commission, both of whom are spending tens of millions of pounds a year on 'euro information'.

"What should be investigated is the amount of tax-payers money being spent on euro propaganda in the run-up to the referendum."

He also pointed out the Neill Commission's report on party political funding, on which the government's draft bill is based, had ruled out capping referendum spending.

It said "it would be futile and possibly also wrong to attempt to impose limits in connection with referendums" because it would "not only be administratively impracticable but would, or at least might, impose an unwarranted restriction on freedom of speech".

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