If Britain votes no ...

Some people claim to know what will happen if a British referendum defeats the European constitutional treaty. Michael Howard, the Conservative leader, points out that the treaty cannot enter into force unless it is ratified by every member-state. He therefore argues that if the British vote No, the EU will carry on as before with the existing treaties. But others assert that if Britain cannot swallow a treaty that the rest of the Union wants it risks expulsion.

In fact neither prediction rings true. What one can say is that a British No would create a new situation that could, in the long run, give birth to a 'core' Europe. Britain and perhaps some other countries would remain in the EU, but outside an inner group that had its own institutions and sought to lead the whole Union.

Exactly what happened would depend on two variables. One is how many other countries fail to ratify the treaty, by parliamentary vote or referendum. Would it be Britain alone, or several member-states? The other variable is the scale of the treaty's defeat in a British referendum.

What happened would also depend on the priorities of other EU governments. There is a minority of European politicians who would seize on a British No as an opportunity to push for the UK's exclusion from the EU. They despair of Britain's loyalty to the US, its xenophobic press, the smug superiority of many of its politicians and its unremitting hostility to most kinds of European integration.

This group overlaps with a rather larger circle of European leaders who favour a 'core Europe'. Jacques Chirac and Joschka Fischer have at various times argued that countries committed to a closer union should establish their own avant-garde. Such politicians might use the collapse of the constitution as a chance to establish a core that excluded troublesome Britons and East Europeans.

However, several EU countries, such as the Nordics, would be reluctant to expel the British or cast them into an outer circle. They believe that Britain's dynamic economy, free-market instincts, Atlanticism and military capabilities contribute a lot to the Union. Nevertheless, if a core group did emerge, some of the more Anglophile countries would not want to be left out. Portugal, the Netherlands and some Central Europeans, for example, might not want to wait for the UK if it meant their own exclusion from Europe's top table.

Suppose that only Britain, or Britain and one or two small states, could not ratify the constitutional treaty. The other members would refuse to renegotiate a document on which they had expended so much time and effort especially since they had already made many concessions to secure the signature of the Blair government. They would ask the British to think again. After all, the Danes initially voted against the Maastricht treaty in 1992, as the Irish did with the Nice treaty in 2001. Both peoples changed their mind a year later, in second referenda.

However, those countries only held second votes when they had received assurances on issues that had proved contentious. The Danes were allowed to opt out of the Maastricht treaty's provisions on immigration, defence and the euro, while the Irish won a declaration saying that the Nice treaty did not oblige them to participate in an EU military alliance. The trouble with the current treaty is that it does not extend the EU's remit into major new policy areas - except for qualified majority voting on asylum policy - from which a timid country could choose to opt out.

The main things it changes are institutional. For example the new rules on 'double majority' voting, or the abolition of the rotating presidency, could not work if some countries opted out. That said, if a referendum defeated the treaty by only a small margin, the British government might consider a second referendum - on the same constitutional treaty. The government might cite plans by other governments to exclude Britain as a reason for voting again. But if the treaty was lost 40-60, a second vote would not be plausible.

If the British did not rethink their opposition to the treaty, they should not suppose that other countries would meekly forget the document. Some would seek to expel the British. François Lamoureux, a senior commission official, proposed in a recent paper for the French think-tank Notre Europe that if five-sixths of the member-states ratified the treaty, it should enter into force. The others would be offered 'associate membership', allowing them to remain in the single market.

However, the existing treaties contain no provision for allowing some members to change them without the consent of all, or for expelling a member. If 24 out of 25 members really wanted to pursue one of those courses, they might just do it. But Britain's friends in the Nordic countries and Central Europe would probably block such radical options. That in turn would encourage believers in a core Europe to move ahead with something that went beyond the Nice treaty.

As an alternative, suppose that Britain and several other countries, including perhaps a large one, did not ratify the constitutional treaty. That would kill it off for good. If France -which may hold a referendum - was among the countries which rejected the treaty, the 25 governments would probably try to renegotiate the document. But if only 'fringe' countries such as the UK, Poland or other Central European states voted No, France, Germany and others would be sorely tempted to move ahead with a core Europe.

Many commentators rightly point to the legal, institutional and political difficulties of trying to establish a core (as opposed to an 'enhanced co-operation' in a particular policy area, which the treaties permit). But the British should not under-estimate the political will in several capitals in favour of a new institutional club - one that would complement the wider Union but allow some countries to integrate further across a range of policies. The core might cover such areas as the economic management of the euro-zone, foreign policy, corporate taxation, migration policy and criminal law. Those in the core would lead the EU; those outside would have to choose between following or opposing the leading group. Thus the British referendum may have huge implications for the way the EU develops.