POOR William Hague. Having had his Christmas spoiled by the defection to Labour of former front-bencher Shaun Woodward and the scab being picked off the Tories' sleaze sore by Lord Archer and the Neil Hamilton libel case, he now heads to the New Year with the party facing a new battle in its civil war over Europe.

For after making peace overtures to the pro-Europe Conservatives who are at odds with his policy of fighting the next election on a save-the-pound platform, the Tory leader today finds ex-Chancellor Kenneth Clarke throwing the olive branch back in his face by praising the euro on behalf of the Britain in Europe pressure group which has Prime Minister Tony Blair among its backers.

In this clearly calculated move, some political forecasters may see a prelude to Mr Clarke also crossing the floor to Labour - particularly if party members in his constituency ignore Mr Hague's keeping-the-peace call to Euro-sceptic activists not to deselect prominent pro-Europeans like him.

That may be an extreme guess - indeed, others see Mr Clarke has a Tory leader-in-waiting, ready to take charge once the right-wing has suffered defeat - but, clearly, the former Chancellor is taking a deliberate risk in re-opening the rift in the party over Europe with his outspoken support for the single currency. And his endorsement will surprise many as he declares that the euro has been an "undoubted success" in its first year, despite it having lost significant value against the US dollar - though Mr Clarke seems to be basing his judgment on forecasts that the economies of the 11 EU countries in the euro-zone are set to grow faster than expected.

But if Mr Clarke is prepared to rock the boat, in contrast to Mr Hague's call to Euro-sceptic Tories not to, the embattled Conservative leader may yet be grateful to him for rekindling the euro war.

For many see the Hague-led official Tory commitment to retaining the pound as the party's strongest card - and the route to its revival.

Mr Hague may be chary of knocking fellow Tories on the head with this single club - particularly high-profile and clever ones like Kenneth Clarke - but if he also sees it bringing him gains over otherwise-invulnerable Labour, as it did at the European elections, then he may be glad of it and be tempted to use it again and again whether or not it highlights the Tories' internal rift on Europe.

Converted for the new archive on 14 July 2000. Some images and formatting may have been lost in the conversion.