Progress on EU treaty, says Blair

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Tony Blair has said he is making progress on meeting the UK's concerns about a new European Union treaty.

A concession to France at the Brussels summit has removed a treaty objective of "free and undistorted competition".

The PM said that a legally binding protocol would ensure the EU's internal market system was not affected.

The protocol was added after telephone conversations between Mr Blair and Prime Minister-in-waiting Gordon Brown who was not happy with the concession.

'Toing and froing'

Mr Blair has gone to Brussels with four "red lines" which he does not want crossed if a deal is to go ahead.

These centre on the UK's ability to make its own labour laws, foreign policy, domestic law on issues such as tax and benefits, and criminal and jurisprudence legislation.

The British Government seems none too worried about Mr Sarkozy ripping out references to 'free trade' and 'competition' BBC Europe editor Mark Mardell <a class="" href="http://www.bbc.co.uk/blogs/thereporters/markmardell/">Mardell's thoughts in full</a> <a class="" href="/1/hi/world/europe/6227834.stm">Polish war of words</a> <a class="" href="/1/hi/world/europe/4596005.stm">Q&A: Changing constitution</a>

Mr Blair said: "We are making progress, so far as we are concerned, on the four key elements for the British position here."

On the concession to France, he added: "The notion that this change in any shape or form changes the way the internal market works is wrong.

"We've got an agreement that underlines that competition and the internal market belief in the free market in Europe remains. This does not change at all."

But he said there was still more "toing and froing" before an agreement could be reached.

Commenting on the reports, Shadow Foreign Secretary William Hague called the move "an astonishing climb down.

He said: "It looks as if our government has just agreed to rip out the jewel in the EU's crown.

"Ensuring free and open competition in the EU is what the EU does best. It has made our economies more competitive and brought down prices across the board."

He said it could signal a return to protectionism "which can only end up raising prices and destroying jobs".

Telephone conversations

The BBC's political correspondent James Landale explained that Mr Blair initially accepted the French concession after he had been assured that it did not change the legal basis of EU law.

However, Mr Brown was concerned that the potential ambiguity about the EU's commitment to competition could impact on British firms' ability to trade freely, our correspondent said.

So after three telephone conversations between Mr Brown and Mr Blair, a compromise was agreed.

A protocol would be added making it clear that EU competition law would remain unchanged.