The struggle between the EU’s three biggest powers over the fate of the constitution, and the future direction of the Union, is likely to deepen the turmoil caused by the French and Dutch “no” votes last week. France and Germany are also expected to step up the pressure on Britain to be a “good European” by insisting that it surrender its budget rebate at a fin ance ministers’ meeting in Luxembourg tomorrow.

The meeting is supposed to agree the EU’s budget for the next seven years, and France and Germany will argue that reaching a deal is essential to prevent a second crisis. But Gordon Brown has insisted that the rebate must stay.

José Manuel Barroso, the European Commission President, sought to calm tensions at the weekend by pleading with EU leaders not to play the blame game. Jack Straw, the Foreign Secretary, will tell Parliament today that Britain is suspending the ratification process for the constitution despite Saturday night’s demand by President Chirac of France and Chancellor Schröder of Germany that all countries pass judgment on the treaty.

M Chirac and Herr Schröder held emergency talks in Berlin to ensure that the FrancoGerman axis remained the motor of EU integration. Traditionally, France and Germany agree a way forward that is then imposed on all other countries but Britain is challenging that arrangement, hoping that it has enough allies in the enlarged EU to ensure the first significant defeat for the combine in 40 years.

British officials are engaged in intense efforts to gather allies to counter the Franco-German axis before an emergency EU summit on June 16 that will try to find a way forward. The Republic of Ireland, Denmark, the Czech Republic, Poland and Portugal have showed signs of wavering on pledges to hold referendums.

One idea said to be gaining ground among the EU’s new Eastern European members was for a nine-month “ratification holiday” that would see the process extended from November until the summer of 2007, beyond likely changes of leader in Germany and France.

The Government believes that a British referendum is now unwinnable and can see no point in continuing unless the French and Dutch can find a way of persuading their electorates to back the constitution. To take effect, the treaty must be ratified by all 25 EU members. British officials are privately exasperated that M Chirac and Herr Schröder have demanded that ratification continue regardless of last week’s rejections. Although most EU diplomats believe the treaty is dead, Britain is desperate to avoid being cast as the assassin.

The Times understands that to put the ball back into the French court, Mr Straw will announce simply that legislation required for a British referendum is “not proceeding” until EU nations agree a way forward. He will not “withdraw” the Bill, or even say that it is suspended, lest Britain appear too eager to pronounce the constitution dead.

Peter Mandelson, who remains close to Downing Street, became the first European Commissioner to suggest that the constitution was dead.

Writing in The Observer, he said: “Ratification needs the support of all 25 EU members. It is difficult to think of all the circumstances on which the French and Dutch votes could easily be reversed and ratification in these countries resuscitated. That leaves Britain for now with no meaningful proposition to vote upon.”

The French newspaper Journal du Dimanche declared after M Chirac and Herr Schröder’s dinner in Berlin on Saturday: “It will take more than a dinner to show that the FrancoGerman couple remains the driving force of the Union. It was fine for Jacques Chirac and Gerhard Schröder to consult each other in Berlin yesterday, but in the present European poker game, Tony Blair has the strong hand.”

In Germany the Free Democrats and some Green politicians demanded a referendum. The German parliament approved the constitution this month without going to the people.

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