There was no enthusiasm to end the monopoly but the present system would be endangered by further action the sources said

There was no enthusiasm to end the monopoly, but the present system would be endangered by further action, the sources said.The warning came as hopes rose of a settlement to the dispute over a pay and productivity package. It is also thought Michael Heseltine, the Deputy Prime Minister, may add to the clamour because of his enthusiasm for privatisation. BARRIE CLEMENT Labour Editor The Government may be forced to suspend the Royal Mail's monopoly on a permanent basis if industrial action continues, according to senior Whitehall sources.As 134,000 postal workers began their second 24-hour stoppage at noon yesterday, Government sources warned that the Cabinet could be under considerable pressure to allow private companies to continue to provide a mail service after the present dispute was over.Pressure on ministers will come from the companies themselves, but also from backbench MPs, the source said. The sources stressed ministers had no immediate plans to allow the private sector to handle letters for less than pounds 1 per item - the cut-off level for the Royal Mail monopoly. Labour officials said the proposal for a referendum had arisen in discussions between Mr Blair and Mr Robertson, the Scottish affairs spokesman, in March.Scottish Labour MPs yesterday predicted that a Labour government would secure a 70-80-per-cent "Yes" vote on the question of a Scottish parliament, but that the vote on its tax-raising powers would be "very tight".Labour's plans plans12ptt Referendums in Scotland and Wales in first six months of a Labour Governmentt Both will ask if people support Labour's plans for assembliest If approved, a Scottish parliament and Welsh assembly will be legislated for in the first yeart In Scotland people will also be asked if they support the Scottish parliament having the power to vary the standard rate of income tax by 3p in the pound, up or downt A Welsh assembly should be elected by a system that has "an element of proportionality", rather than the first-past-the-post system preferred by the Welsh Labour Party in the past.

"I'm absolutely furious at the change that has been announced It's a disgrace," he said. He described the decision as an "insult" to the Constitutional Convention, in which Labour and Liberal Democrat politicians, Church leaders, trade unionists and others have for several years been laying plans for a Scottish parliament.However, at a meeting of Scottish Labour MPs last night, only three MPs, Irene Adams, Willie McKelvey and Dennis Canavan, attacked the proposal while 19 MPs spoke in favour.They were yesterday joined by another left-wing dissident with nationalist tendencies, George Galloway, who described the plan as a "blunder" which will "split the Labour Party and our allies in Scotland right down the middle".It emerged yesterday that the decision was only taken last week by Mr Blair, the three senior Scots in the shadow Cabinet, Gordon Brown, Robin Cook and George Robertson, and by Ron Davies, the Welsh spokesman. "What the media does not address is whether it is a good idea or not - they are stuck in the U- turn timewarp," said a spokesman for Mr Blair.John McAllion, a frontbench spokesman on Scottish issues, is expected to resign today. Harold Wilson and James Callaghan tried to set up a Scottish parliament and a Welsh assembly, but failed. "If we win the election, I want to be the prime minister who does it," he will say.Mr Blair will accuse the Scottish press of being "out of touch" with their readers. JOHN RENTOUL Political Correspondent Tony Blair, the Labour leader, will today challenge critics of his U- turn over referendums on Scottish and Welsh devolution to engage in "reasonable debate" rather than charges of betrayal.In a speech in Edinburgh and a string of interviews, Mr Blair brushes aside a furious backlash in the Scottish Labour Party, which yesterday saw Lord Ewing, a former Labour minister, resign as joint chairman of the cross- party Scottish Constitutional Convention.He will dismiss charges of betrayal as "utter nonsense" and urge his Edinburgh audience to ask whether a referendum is sensible or not. He added that "none of the government parties believe that the present situation is satisfactory".Ms Guerin's colleagues on the Sunday Independent yesterday called on all Irish journalists to observe a minute's silence in her memory at 1pm next Monday 1 July "as a signal to those who murdered her to say we are not going to be intimidated"..

A government committee will report on possible measures a week before the Dail's special sitting.Until now tax laws have not been used against major crime figures. The Revenue Commissioners last night confirmed no one has ever been jailed in the history of the Irish state for tax fraud, apart from a Cork man given a three-day sentence for not paying a fine.Tightening Ireland's liberal bail laws, which have been blamed for preventing the remanding in custody of major drug dealers awaiting trial, may require a constitutional referendum.One senior source argued that it was "more important to get it right than get it done quickly". A mass of floral wreaths and tributes were laid outside the Irish parliament at Leinster House. One inscription read bluntly: "Who do we vote for to do something about this?"Irish politicians are facing bitter public criticism over what is widely seen as a complacent attitude towards loopholes in the law and towards garda resources that have enabled drug dealers to escape imprisonment.A government spokesman said the new measures to target earnings and assets from crime will be put to the special Dail sitting on 25 July.The aim is to provide wider grounds for prosecutions of those involved in organised crime and drugs, drawing on joint initiatives from the Irish tax authorities, the Revenue Commissioners and the Departments of Finance, Justice and Social Welfare. This was backed up by the Prime Minister, who is said to have written to him telling him that he has done an excellent job. Mr Hogg was blamed by Tory MPs, especially right-wingers, for failing to adopt a more aggressive stance in negotiations with the European Union in the early stages of the beef dispute John Rentoul. ALAN MURDOCH Dublin The Irish government is to launch a crackdown on organised crime as a wave of public outrage grows over the murder of Dublin crime reporter Veronica Guerin.The Dail is to be recalled for a special summer sitting next month to consider emergency legislation to target crime earnings and criminal assets, and possibly tighten up bail regulations.Ms Guerin, who was renowned for her investigations into some of Ireland's leading criminals, was shot dead at the wheel of her car by two gunmen on a motorbike when she pulled up at traffic lights on a main road into Dublin on Wednesday.The murder - which police believe was ordered by an ecstasy manufacturer in west Dublin - has provoked an outcry.