Europe will be the trickiest political test for Tony Blair in his remaining weeks in office, and for Gordon Brown in his first few months in power. There is no question of reviving in full the European Union constitution that was defeated in the French and Dutch referendums two years ago. The question is how much will be retained – whether we are talking about minimal changes (the view of many EU members) or a minimalist treaty (the British, Dutch, Danish and Czech view).

Mr Blair and Mr Brown are trying to find a middle way between what is acceptable to Angela Merkel, the German Chancellor, and the probable French President, Nicolas Sarkozy, and what is politically saleable in Britain without a referendum, which would probably be lost.

The earlier British line was that the EU should concentrate first on urgent issues such as the Doha trade round and economic reform. But Mrs Merkel and José Manuel Barroso, the Commission President, have won the day in arguing that such policy reforms will not happen without institutional changes to take account of the enlargement of the EU to 27 members.

No matter what is agreed, many Eurosceptics will denounce the deal as a sell-out, a constitution by the back door, and demand a referendum. The official Conservative position sounds hardline but contains some room for manoeuvre, as William Hague has hinted in recent speeches. He has said: “It is vital that any new treaty that transfers power from Britain to the EU should be subject to a referendum.”

A bluffer's guide to the EU treaty

Our correspondent hacks through the verbiage to explain what happened at the EU summit and what it means

• Patchwork deal proves Europe cannot heal its deepest wounds

BACKGROUND

• Unconstitutional

• Fresh start or revived constitution?

• Merkel’s dream; Britain’s nightmare

• Brown’s first test: how to avoid an EU constitution

• Europe divided over summit plans

“Transfers power” is a subjective term. Mr Blair portrays his proposals as similar to earlier EU treaties, such as Amsterdam and Nice, claiming that they were merely amending agreements that were not subject to referendums. He wants to limit any treaty to new voting rules (a key Polish objective, as Mr Blair will discuss in Warsaw today), a new EU president in place of the six-month rotating presidency, a foreign minister to take over from the present representative of the Council of Ministers, and greater powers for national parliaments. But he wants to exclude changes to the legal identity of the EU and the charter of fundamental rights. Many countries, especially the two thirds who have ratified the original treaty, will want more of the original constitution.

The warnings issued by Mr Blair and other EU leaders about a larger treaty being lost in referendum defeats are credible. But blocking a deal will not work either. The institutional debate will not disappear. There are also downsides. If Britain is seen yet again as the awkward laggard, Mr Brown will find it hard to create a leadership troika with Mrs Merkel and Mr Sarkozy.

Mr Brown has always been very cautious, when dealing with the issue of the EU, to head off attacks by the Tories and the Eurosceptic media. There is no way that Mr Blair, with his reduced authority, can any longer bounce Mr Brown. Even though Mr Blair will attend the EU summit in late June, the negotiating position will be a joint one.

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