by RAY FLEMING

TONY Blair's path to the general election and then, assuming he has won it, to the presidency of the European Union in the second half of this year, and then, assuming he has survived that in reasonable shape, to the referendum on the EU constitution next year, is littered with obstacles and traps of all kinds.

None is more potentially troublesome than the issue of the three billion pound rebate that Margaret Thatcher won at the “handbag summit” at Fontainebleau in 1984.

This annual rebate is still being paid but, as negotiations begin for the EU's 2007-13 budget, voices are being heard in Brussels that the time has finally come to stop what is known as the cheque Britannique. Both Mr Blair and Gordon Brown have made very clear their intention to hold on indefinitely to what Mrs Thatcher won twenty years ago.

However, the last thing the Prime Minister wants between now and a May election is a public, and perhaps acrimonious, battle with the rest of Europe; even less would he want it held over until just before the referendum on the constitution next year.

According to some press reports yesterday, Britain has persuaded Brussels that the rebate negotiations should not take place until the end of May (after the general election) and before the end of June when Britain takes over the EU presidency.

That leaves a tiny window of opportunity to reach agreement on one of the most resented aspects of Britain's EU membership. If Britain, a rich country, manages to keep the money it will mean there is that much less for transitional payments to the ten new EU members, who are almost all poor.

Germany, by far the largest contributor to the EU budget, thinks the burden should be more fairly shared.

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