EUROPE was back haunting the Tories yesterday, creating tensions

reminiscent of the Thatcher years, as Foreign Secretary Douglas Hurd

sought to build bridges between Britain and its European partners.

He said he did not think there was any advantage to Britain in

delaying the signing of a treaty embodying closer political and economic

union, due to take place at a summit in Maastricht in December, although

the Government would not reach an agreement at any price.

He did not rule out the possibility of a recall summit early next year

after further negotiations to find a form of words with which Britain

could agree, but he said: ''This is not our aim and it is not desirable.

It would be much better to deal with this in an orderly way during the

Dutch presidency this year and then get on with the next steps in the

Community next year.''

However, as the Foreign Secretary tried to take a positive and

constructive line on future relations with the rest of the EC, the depth

of concern on the Tory benches was amply demonstrated by former Cabinet

Minister Norman Tebbit.

Echoing the fears of a significant and vocal number of Tory MPs, he

urged the Prime Minister to oppose at this stage the moves towards a

single currency for the EC. He warned that otherwise the Chancellor

would end up looking like the ''treasurer of a rate-capped local

authority'' and would arrive at the Commons with a budget stamped ''made

in Brussels''.

Mr Tebbit, interviewed on BBC television's On The Record, said: ''If

we cannot win the argument that a single currency would be politically

unacceptable, not just in Britain but I think in France and Germany and

other countries too, after a while we should say we cannot go along with

it.''

Mr Tebbit made clear that he would like a ''No'' from the Prime

Minister at Maastricht: he is concerned over the extent to which Britain

could lose control of the running of its own affairs.

The European issue has once again raised its head at a difficult time

for the Government. It is already under heavy fire over the National

Health Service and an opinion poll yesterday gave Labour a six-point

lead over the Conservatives.

Mr Major is said to be shocked and disappointed by the way in which

Britain appears to have been targeted in recent weeks by senior EC

figures such as Commission President Jacques Delors and Environment

Commissioner Carlos Ripa Di Meana.

Apart from his meeting with Chancellor Helmut Kohl of Germany on

Friday, Mr Major is also planning bilaterals over the next few weeks

with Presidents Andreotti of Italy and Mitterrand of France in an

attempt to find common ground.

In addition, it is virtually certain that the Commons will hold a

major set-piece debate on Europe within the next few weeks in which the

Prime Minister will seek a mandate for his stance on political and

monetary union.

Mr Hurd said agreement on the final shape of Europe would not be

reached at Maastricht: that would ''probably be for our children''.

He said: ''What we have to try and decide at Maastricht is whether

there is enough common ground for a further worthwhile step forward. I

think there is and it is in the interests of Britain that there should

be an agreement at Maastricht. That is what we will be aiming at even

though we are not going to agree, obviously, on the final, the ultimate

shape.''

There were ''federalist ideas'' which Mr Major would not be able to

recommend to the House or the Cabinet, but the Government was working

for an agreement which would involve give and take by everybody.

Labour, meanwhile, accused Ministers of manoeuvring to prevent a split

in the Tory ranks. Shadow Foreign Secretary Gerald Kaufman said: ''Yet

again the Government is preparing for a European summit by planning a

row, a confrontation, and British isolation.

''Yet again Britain's future in Europe is being governed not according

to the nation's interests but in an effort to keep the warring Tory

Party from splitting again.''

Liberal Democrats leader Paddy Ashdown said: ''At the beginning of a

crucial week the Tories are at sixes and sevens over Europe. The

Government is uncertain over economic union and suspicious of political

union. Britain now risks isolation at Maastricht and a permanent place

in the second division of Europe.''

Labour lead5