Politics - Cathy Newman sees past the bickering has-beens

Blair may want to delay his departure until he is satisfied he has left his mark, but the Chancellor

Like ageing cabaret artistes approaching the end of their run, Tony Blair and Jacques Chirac are bickering ever more loudly, but the new Europe that will emerge from the carnage of the French Non will be built not by the old-timers, but by the next generation. Step forward the intriguing trio of Gordon Brown, Nicolas Sarkozy and Angela Merkel.

The Chancellor, whose studied scepticism about the way the EU does business led first to outrage and then to envy in No 10, believes he may be able to do business with his putative counterparts in France and Germany. The calls for economic reform now being championed by Blair were first sounded by his rival. As one senior Whitehall official tells me: "It's Brown's agenda anyway. Blair's just the frontman." There is growing confidence in the Treasury that, once Chirac and Gerhard Schroder are safely out of the way, their replacements will break with the Franco-German protectionism that has bedevilled the European project to date.

Both Sarkozy and Merkel are, like Brown, Atlanticists - at least in economic terms. The geo-strategy remains to be seen. While Chirac has stubbornly defended the bloated Common Agricultural Policy, Sarkozy, who cut his political teeth in the suburbs, is likely to be unsentimental about farm reforms. Already a regular guest in Whitehall, he has also signalled publicly a willingness to look beyond the Franco-German axis.

Merkel, meanwhile, who would be Germany's first female leader, has positioned herself as a reformist who would seek to cut her country's unemployment. Her pro-business stance would endear her to Brown. That's not to say that it will be "all for one and one for all" when, or if, Europe's three musketeers are collectively installed - perhaps by 2007. One crucial sticking point for Brown would be the opposition of both Merkel and Sarkozy to Turkish membership of the EU.

Yet such difficulties are as nothing compared to the battle royal that looks about to break out during the UK's presidency of the EU, starting next month.

One of Blair's aides fears "un grand row" is brewing over the British economic reform agenda. He says: "It's going to be extremely difficult to sort anything out inthe six months." Chirac's closest advisers

are warning that France will be more bloody-minded in Europe and not less.

The UK's budget rebate, the future of the EU Services Directive - which Chirac ensured was watered down in the run-up to the French referendum - Turkey's admission and Britain's continued opt-out from the Working Time Directive are all potential flashpoints.

While others have argued that the French vote let Blair off the hook, saving him from certain defeat in his own referendum, the reality is that it leaves him dangling, with an equally bloodied Chirac looking to inflict pain on a man he can no longer abide. The French will not forget how they were bounced into a vote only after a weakened Blair buckled last summer under pressure from the artful Jack Straw, who has been looking distinctly pleased with himself over the past few days, now that a UK referendum is almost certainly off.

Blair allowed himself to be talked into a referendum, believing it could provide his best shot at a European legacy. It was also a neat cut-off point, after which, win or lose, Brown seemed poised to inherit the crown. Now the Chancellor's allies are confused about where this leaves them. "I don't think it has crystallised. Blair is scrabbling around: he doesn't know what to do yet. This man doesn't think strategically," says one Brownite. As the PM struggles to leave his mark, the danger for Brown is that Blair's departure recedes further into the distance. The Chancellor's growing

back-bench fan club won't let that happen.

While a referendum was on the horizon, Labour MPs would have felt duty-bound to keep the peace. Now they are no longer under pressure to unite against the Tories on the EU constitution, Blair will find it harder to maintain order.

"What Gordon wants to know, like everybody else, is 'when?'," a friend of Brown says. The Brownites have been asking that one-word question for some time, and it may be a while yet before it gets an answer. The paradox is that the ardent enthusiast Blair could bow out with Europe more fractured than ever, leaving the less romantic Brown to build a more cohesive EU politics.

Blair once fondly imagined that Europe would provide him with a place in the history books. But it now seems far more likely that he may secure himself only a footnote on the wars with the French, rather than a chapter on how he finally persuaded the Brits to embrace the Continent.

Cathy Newman is chief political correspondent of the Financial Times. This is the latest in our series of political columns by guest writers.