Paris postpones Chirac-Blair talks as tensions rise

France postponed key talks between President Jacques Chirac and British Prime Minister Tony Blair yesterday as a spat over farm aid exposed deeper strains over who calls the shots in Europe.

Diplomatic sources in Paris said the Franco-British summit scheduled for December 3 had been put off, after revelations that Blair was angry over a pact between France and Germany that stymied Britain's demand for a reform of European Union farm funding.

"We need a bit of time on both sides to make sure that this important meeting is properly prepared. We will let you know the date for the next summit once it is set," said Foreign Ministry spokesman Francois Rivasseau.

Other sources revealed that Paris and London were in fact at odds over a range of issues including Iraq, fledgling endeavours to give the 15-nation EU a bigger role in defence and peace-keeping in places like Macedonia.

"We have our differences, it's true. We are willing to discuss the underlying issues, but the goal is not to tear each other to pieces or trigger a media war. This is also the view in London," one French diplomatic source said.

Such standoffs were more commonplace when Margaret Thatcher yelled "I want my money back" at an EU summit in the early 1980s or her conservative successor, John Major, locked horns over a French ban on British beef before Blair took power in 1997.

Chirac's office would not make any official comment on the postponed summit, but the response from London was rapid.

Blair's official spokesman said: "There's no desire on our part to see the summit cancelled. The next one is in France. It is for the French to announce when and where it is.

"People just have to get used to the idea that just as the French will fight for their interests, so will the United Kingdom," the spokesman added.

Britain's eurosceptic opposition Conservatives said the farm aid deal agreed at a European Union summit in Brussels at the weekend had exploded a myth.

"Again and again we hear this country is leading for Britain in Europe but seldom has his (Blair's) failure to practice what he preaches been so transparent," Conservative leader Iain Duncan Smith said.

One British official, speaking on condition of anonymity, said that Blair could have lived with the setback on farm funding, but that the British leader could ill afford another clash with Chirac in UN negotiations on disarming Iraq. (Reuters)

"Iraq is much more serious," he said. Chirac is a conservative who has shot back onto the world stage since June elections freed him of the need to share power with a left-wing government in France. He has led resistance to pressure from US President George Bush, and Blair, for a tough UN resolution that could trigger automatic military action against Baghdad.

The postponement of the Franco-British summit - officials in Paris said it could be rescheduled for early next year - also showed strains that often bubble below the surface as the heavy hitters in the EU seek alliances to hold sway over the rest.

Blair wanted sweeping reform of the EU's common agricultural policy (CAP) including the phasing out of direct aid payments to farmers, which Britain argues reward them for overproducing and prevent developing nations from competing on equal terms.

The deal between Chirac and German Chancellor Gerhard Schroeder on the eve of the Brussels summit presented their partners with a virtual fait accompli, leading to a deal to cap farm spending after 2006 - after 10 new member states join the bloc - but to delay tough reforms for many years.

French Prime Minister Jean-Pierre Raffarin said on Monday that what counted was that Chirac had defended the EU's farm funding programme, got his way, and that the Franco-German train was back on track as the driving force of EU integration.

"When the Franco-German couple doesn't work, Europe doesn't go forward," Raffarin said.

A senior diplomatic source in Brussels said Chirac had been so incensed by Blair's behaviour during the summit in Brussels that he had told aides on the plane home he planned to postpone the Franco-British summit for several months.

After he calmed down and talked it over with Raffarin, he decided to reduce that to a few weeks to show his displeasure, the source said.

What irked Chirac was that Blair repeatedly returned during the summit to the issue of the need for a radical "mid-term review" of the CAP in what was seen as a hostile attitude towards France, the main beneficiary of the existing system.

"I've never seen Blair so out of it," said another official in Brussels, the main home of the EU institutions.

"He arrived apparently expecting there would not be a Franco-German deal and when he discovered there was one, he was disoriented. He had no Plan B. He reacted petulantly, not intelligently."

France's farm minister dismissed Britain's objections to the EU farm deal and said Britain was only interested in the EU as a big free trade zone for business.

"The British have been against the CAP for 40 years. Moreover, they are against all common policies, as they say themselves," Farm Minister Herve Gaymard told Europe 1 radio.

"For the British, in fact, the European Union is a free trade zone, it's not a political area that needs to construct its own identity and have common policies," he said.