TONY BLAIR is preparing to battle with President Chirac of France over Europe’s political direction for the coming decades.

The chaos in Brussels caused by France’s unexpectedly emphatic rejection of the European constitution has put Mr Blair, who takes up the EU presidency in July, in a powerful position to impose his vision of the future shape of the Union.

He refused yesterday to declare the constitution dead or to say whether Britain would hold a referendum on the constitution, rejected by French voters by 55 per cent to 45.

British officials said that they would prefer European leaders to reach that conclusion on their own. Dutch voters are expected to deliver a knockout blow to the treaty, originally created by France, in their referendum tomorrow.

The Prime Minister called for a “time of reflection”, and said that French voters — many of whom want more social protection from Europe — had raised serious questions about the future of the EU.

Taking a break from his Italian holiday, he said: “The question that is being debated by the people of Europe is how do you, in this era of globalisation, make our economies strong and competitive?” The political vacuum has prompted a battle for the “heart of the Union”, with Mr Blair keen to push more liberal economic policies, rather than French-style social protection with a large welfare state.

Victory on settling the future direction of the EU would give Mr Blair the European legacy that he has long hoped for.

The day after the unexpectedly large “non” vote, it became clear in Brussels that several fronts have been opened by the demise of the constitution.

These include future Euro-pean social and economic policy, the British rebate, the size of the European budget, and enlargement, including Turkey’s application for membership, which Mr Blair championed.

Marco Incerti, of the Centre for European Policy Studies, which is funded by the Euro-pean Commission, said: “There will be a fight for the heart of Europe.”

President Chirac is expected to push hard to reassert his political authority. Sources close to the French President have given warning that he will be “more difficult, less co-operative and less European-minded than before”. One said: “The French Government will interpret ‘no’ as against being European-minded and reasonable on things like the budget.”

Charles Grant, the director of the Centre for European Reform, which is close to Mr Blair, said: “The British presidency will be a very difficult act to pull off well. France’s ability to be bloody-minded is great.”

EU leaders will try to resolve the crisis at a Brussels summit next month, but if, as expected, they fail, it will fall to the Prime Minister to find a way out of the impasse.

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