Blair accused of sleight of hand over EU rebate and CAP reform

TONY Blair yesterday faced a two-pronged attack over his drive to cut European farm subsidies and Britain's European Union budget rebate.

The Prime Minister repeated yesterday that the 3 billion rebate could be lost in a budget that was restructured to hack back the Common Agricultural Policy of farm subsidies, so fiercely guarded by France.

Both the rebate and the CAP are "anomalies" of an outdated budget that does not do enough to encourage economic growth or help poorer EU countries in eastern Europe, Mr Blair said.

"We have made it clear all the way through that we are prepared not just to discuss and negotiate upon, but to recognise that the rebate is an anomaly that has to go, but it has to go in the context of the other anomaly being changed," Mr Blair said.

Until yesterday, the Conservatives had been cautiously supportive of Mr Blair's European policy, tacitly applauding him for collapsing last week's Brussels summit without a budget agreement.

But George Osborne, the Tory shadow chancellor, yesterday attacked Mr Blair.

"One minute Mr Blair says he will fight to the end for Britain's interests. The next he says Britain's rebate is an anomaly that has to go," Mr Osborne said. "He is more slippery than an eel in a tub of grease."

And in Paris, Dominique de Villepin, the French prime minister, accused Mr Blair of blocking all negotiations in Brussels and attempting a "sleight of hand" by linking the rebate and the CAP.