RETURNING tomorrow from his from his summer holiday, Prime Minister Tony Blair will find a fuse fizzing for an explosion that could blow up in the middle of the coming conference season, exposing Labour to splits over Europe as damaging as they have been to the Tories.

For with his now-characteristic tendency to cause or attract trouble while left in charge, Deputy Premier John Prescott signals that he could lead a Cabinet revolt against taking Britain into the single currency.

This is a clear departure from the leadership's strategy - one that has been somewhat low-key since Labour suffered in the European election at the hands of voter apathy and of the active electorate falling for the Tories' frosty front towards the EU.

For although Mr Blair and Chancellor Gordon Brown have laid down strict economic criteria that must be met before Britain will consider membership of the euro - ones that might delay any referendum on the future of the pound for years - the government's understated policy is still for signing up for the single currency.

Perhaps Mr Prescott has any eye on opinion poll evidence and the European election results which suggest most British voters are not so willing, but in displaying a clear breach with the leadership he is not only asserting his individuality in contrast to the collective responsibility expected of his position as a Cabinet minister, but he is also scoring the overture for an autumn bust-up within Labour.

With the TUC and Labour conferences looming and with the big trade unions split on membership - the TGWU and UNISON fearing the euro will cost jobs and harm the UK economy while the GMB and engineers are less hostile - the issue may dominate the political agenda and reveal the true extent of the rifts among Labour supporters over membership. At least, the debate on the euro, which is forever being suppressed by the Blair camp - to the extent that it virtually ignored the topic in the Euro elections - may at last be truly ignited as the magnitude of the issue deserves.

And we may also expect some fat thrown on the fire by the Tories. For despite having dissidents to the official party line of 'In Europe, but not run by Europe' and the posture of being the only party pledged to the pound, the Conservatives have targeted the topic and shown it is one on which they can score points.

The fuse now fizzing will test Mr Blair's mettle to stamp his leadership on the party and close the rift Mr Prescott seems set to open wide.

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