JOHN MAJOR, Britain's most unpopular leader since World War II, has decided that the best way to deal with dissent in his own party is with a sledgehammer.
Last week the prime minister threatened to call a general election if rebel Conservatives try to thwart his will over policies toward the European Union.
But after bullying his party into submission, Mr. Major's government has offered to appease rebel Conservatives with a possible national referendum two years from now to decide whether or not Britain joins a single European currency.
Major's tough tactic was a drastic shift in approach that comes after four years of sniping by ``Euroskeptics'' who resent what they see as surrender of British sovereignty to the EU. His concession indicates that the leader is still walking a tightrope within his ruling party.
Major's patience finally snapped last week as a group of rebel Conservatives threatened to vote down a bill that would increase Britain's contributions to the EU budget. Major told the critics that he would ask the queen for a dissolution of Parliament rather than cave in to their views.
Under the EU's system of finance, member states contribute to a central budget. Two years ago, Major agreed that Britain would increase its contributions, starting in 1995.
``This is a matter of confidence, because the bill has to be passed to implement an agreement the government made last year with Britain's EU partners,'' a Downing Street official said.
Kenneth Clarke, chancellor of the exchequer, said that, under the British constitution, ``if the government cannot carry this piece of legislation, it has no alternative but to resign.''
The ruling party has a majority of only 14 seats in the House of Commons and becomes vulnerable if even a few Conservative members of Parliament (MPs) vote against it or abstain.
To buttress his sledgehammer strategy, Major sent a warning out to the constituencies of dissident MPs that a vote against the government would ensure that their members lost the right to campaign as Conservatives at the next general election.
But he balanced the threat by authorizing Foreign Secretary Douglas Hurd and other senior ministers to introduce the possibility of a national referendum on adopting a single European currency after the EU's intergovernmental conference in 1996. The Euroskeptics have consistently demanded such a referendum.
Before calling the rebels' bluff, Major sought the backing of a group of senior ministers who agreed that the entire Cabinet would resign if the Euroskeptics overturned the EU finance bill. The media immediately began speaking of a collective Cabinet ``suicide pact,'' but the threats soon had the desired effect.
Although Major gave himself breathing space by trouncing his critics, the political fallout threatens to create new problems for him.
When it became clear that they stood to lose the EU finance vote, the Euroskeptics switched tactics and began looking for a candidate to oppose Major for the leadership of the Conservative Party at annual elections due next month.
Nominations for a leadership challenge must be in by tomorrow.
Sir Teddy Taylor and William Cash, leaders of the Euroskeptics, asked Norman Lamont, a Euroskeptic whom Major sacked from his post as chancellor last year, to stand as a ``stalking horse'' candidate.
Edward Leigh, dismissed in 1993 as trade minister because of his anti-EU views, issued a 23-page ``manifesto'' stating that Britain should ``seriously think about leaving the EU.''
While the prime minister was rebuffing critics of his EU policies, a leaked memorandum from the Conservative Party's deputy chairman said voters were ``completely disillusioned'' because they believed ``the government has let them down.''
The memorandum called the Major administration ``complacent'' and ``lacking a sense of direction.'' Voters needed to be offered a fresh set of policies, it said.
A day later a Conservative Euroskeptic MP was forced to resign a senior party post after publishing a newspaper article in which he attacked Germany for causing two world wars and called France ``a nation of collaborators.''
The government's problems gave Tony Blair, leader of the opposition Labour Party, an opportunity to ridicule his rival.
``After this week,'' Mr. Blair said in the House of Commons last Thursday, ``would not any objective, reasonable observer conclude that this party has become an ill-disciplined rabble incapable of governing this country?''