European Union leaders last night reached agreement on the shape of the controversial committee of euro-participating states, the Euro-X, which will provide political direction to the management of the single currency.
A bitter row, that pitched British ambitions to be at the heart of EU leadership against French hopes to create a political counterweight to the European Central Bank, was being resolved and both sides were claiming victory and satisfaction with the outcome.
Last night the Luxembourg presidency of the EU was working on the detailed draft of an ambiguous agreement whose implementation "in good faith" by the member-states may or may not put an end to the row.
"Only time will tell," was how one diplomat put it.
The agreement attempts to balance the determination of the British and other "out" currencies to be present at most of the discussions of the "ins", and the latters' insistence that they have a right to meet alone and to decide when to admit others.
The agreement will mean that "outs" can participate in the Euro-X discussions when they can show the "ins" that the issue being discussed affects them equally. But there was a sharp dispute last night between British spokesmen and the European Commission about what happens when there is a disagreement about which issues are matters of common interest.
Irish and Commission sources said that the compromise which is being worked on would allow the "ins" to exclude the "outs" from their deliberations of issues like the euro-dollar relationship.
The British, on the other hand, were claiming that they had established the absolute right to attend meetings and that any dispute would be resolved at full Council of Finance Ministers (Ecofin) meetings.
But the key advance yesterday, according to the Minister for Finance, Mr McCreevy, was the acceptance by the "outs" that there were issues on which the "ins" could legitimately meet alone.
The leaders agreed a formulation on that issue along the following lines: "The joint management of the single currency may give rise to issues only affecting the countries participating in the euro. It is noted that in that case, the ministers of the countries participating in the euro will meet to discuss these matters."
Leaders also agreed that no such meetings would be allowed to undermine the role of Ecofin as the forum for hard decisions.
In essence, the deal involves the establishment of an informal subcommittee of Ecofin involving the "ins", initially likely to be 11 members. It would circulate its agenda to all members who might then express an interest in participating in the discussion on some of the items.
Still left ambiguous is the difficult definition of the list of items that could be discussed exclusively by the "ins" or, more likely, how, if the "outs" express interest in such discussions, the decision would be taken on a case-by-case basis to let them in.
Appealing to the British to make the extra half-mile for a deal, French President Jacques Chirac is understood at the meeting to have pleaded that France had already made serious concessions. He was strongly backed by Germany's Chancellor Helmut Kohl and the Belgian Prime Minister, Mr Jean Luc Dehaene.
The British Prime Minister, Mr Tony Blair, was under significant pressure last night, with diplomats saying there was evidence at the leaders' meeting of considerable exasperation over his refusal to recognise what was seen as the inevitability of a lesser role because of non-participation in the single currency.
"What is important," he earlier told journalists, "is that if there are matters which should be discussed by all 15, they have got to be discussed by all 15, and there can't be small clubs that try and take over the running of the European Union economic policy."
His spokesman was desperately trying to paint the compromise as a major concession by the "ins" which would ensure an effective British presence at all the key discussions.
Not so, diplomats were saying, citing the exchange rate issue, likely to be the most painful exclusion for the "outs", and insisting that the Euro-X would be able to continue its discussions without the non-euro states.
Ireland, Mr McCreevy said, had recognised the merits of both sides' cases. It sees the close involvement of the British in management of the euro as a necessary counter-weight to the Franco-German axis. But it is willing to see an arbitration role for the Commission over where to draw the line on Euro-X involvement.
The result is likely to be a complicated package, difficult to implement, in which Britain's role is far less entrenched than it pretends, but in which French aspirations for an "economic government" role for the Euro-X are firmly restrained.
The extended and arcane debate, in its nuances more about appearance than reality, has clearly driven Mr McCreevy to near distraction - he has been at the same discussion now for more than four meetings running to nearly 20 hours. A source close to him commented wryly: "Sure if the carried on like this at Ballymagash District Council, they'd be a laughing stock."
