It is Blair's third meeting with Giscard D'Estaing

Ahead of the meeting, the prime minister's spokesman condemned "hype and scaremongering" from Eurosceptics who fear the constitution will lead to the loss of more British sovereignty.

But Conservative leader Iain Duncan Smith said the draft constitution proposed "deep and dangerous changes" to how British people were governed, adding a referendum on the issue was crucial.

I think the people should decide, not politicians Frank Field Q&A: European Convention

Mr Duncan Smith used a speech at the British-Swiss Chamber of Commerce in London to accuse the government of being split over both the European Union constitution and the euro single currency.

Later, he added: "Surely the scaremongers are the people who refuse to put it to the British people and then pretend it is something else."

Pooling powers

Labour MP Frank Field is to table a bill calling for a referendum on the EU constitution, arguing that British sovereignty would be ended if the constitution were adopted.

The government rejects the referendum calls, insisting national sovereignty is not at stake.

The prime minister has said the UK would maintain full control over key areas such as taxation, foreign and defence policy under the plans.

A spokesman for Mr Blair said: "Amidst all the hype of recent days it is easy to lose sight of where the EU is going.

Straw says some of the debate is absurd Cabinet ministers start euro meetings

"As Valery Giscard d'Estaing said this is not part of a plot to establish a European superstate but to complete a free Europe."

Mr Blair's spokesman said it made sense to pool efforts when it came to issues like crime and the environment.

Monday's meeting was Mr Blair's third with former French president Mr Giscard d'Estaing about the convention.

Larger Europe

Downing Street said the two-and-half hour talks were a "useful opportunity to exchange views".

It was not revealed what was discussed, but Mr Blair was reported to have been planning to lay down a set of "red lines" which would mean a British veto if they were crossed.

As well as tax and foreign and defence policy, they include social security policy and a demand for the word "federal" to be left out of the final draft constitution.

Foreign Secretary Jack Straw also played down the implications of the convention proposals, which were "not about the sacrifice of national civilisations, nor about the imposition of central control".

He argued the UK would not accept any change that threatened British interests.

"This is about making an enlarged European Union more efficient and open," said Mr Straw.

"It is absurd to suggest, as some in Britain and elsewhere do, that the EU 25 will be a tyranny, when this wider Europe has been built on tyranny's defeat.

"The British public deserve a higher level of debate than this."

Vote pressure

Mr Field is seeking to increase the pressure for a vote, calling the draft constitution "horrendous" and saying it would spell the end of Britain's sovereignty.

There are fears the draft could include giving the EU sweeping new powers.

Several member states have already said they will hold a referendum, including Ireland, Sweden, Denmark and Spain.

Mr Field said: "When it comes to the establishment of a single European state, the people of Britain should have a choice."

It will be for the government to allow time in the Commons for his bill, due to be tabled this week, to be debated.

If the government refuses, one of the opposition parties could step in and offer some of their time.

'Premature'

A British campaign group, provisionally called Vote 2004, has been set up by a number of Eurosceptics to campaign for a referendum.

Former Conservative cabinet minister Leon Brittan, who was a European commissioner, said the referendum calls were "grotesquely premature".

The demands were distracting from deciding the UK position when the draft plans were discussed among European presidents and prime ministers, argued Lord Brittan.

Recent opinion polls have suggested as many as 84% of voters think a referendum should be held before a new constitution is adopted.

The convention row was stepped up as cabinet ministers began their individual meetings with Mr Blair and Chancellor Gordon Brown about the other thorny European issue facing the government - the euro currency.

BBC political editor Andrew Marr said pro-euro ministers were using the meetings to call for a bill allowing for a euro referendum to be included in the next Queen's Speech.

The government will announce its decision on the single currency on 9 June.