Blair: People will respond to a serious EU debate

He said parts of the constitution were "perfectly sensible" and that at some point Europe "is going to have to" adopt some of rules suggested in it.

He told the Financial Times the "no" votes was an "opportunity" for the EU.

But Conservative leader Michael Howard warned against introducing the treaty, or parts of it, "by the back door".

In what was seen as an olive branch to France and Germany Mr Blair said the economic reform urged by the UK could not fully dismantle existing welfare systems.

Eliminating uncertainty

On Monday, Foreign Secretary Jack Straw told MPs there was "no point" in pursuing plans for a referendum on the EU constitution after the rejections in France and Holland.

But he told BBC Radio 4's Today programme on Tuesday the situation was "rather fast moving" and Britain could review its position if circumstances changed - although he was unable to say what these would be.

It is not for Britain to turn round and say the constitution is dead and that is why we are not saying that today Tony Blair

France's Jacques Chirac and Germany's Gerhard Schroeder say they want the ratification process to continue.

In the FT interview Mr Blair said the government had decided to shelve plans for a referendum because to not do so would have prompted a continual "will we, won't we" debate.

He said it was "sensible to eliminate that uncertainty right away", although he still believed the treaty was good for an EU with 25 member states.

Serious debate

"A Europe at 25 can't work as the Europe at 15, and when you enlarge to 27, and then 28, you know we will need that set of rules, and it is not for Britain to turn round and say the constitution is dead and that is why we are not saying that today," he said.

However, he said it would be wrong "to plough on regardless as though the votes [in France and the Netherlands] hadn't happened".

If what we do is simply stand up and say well we are just carrying on regardless, I think people will rebel against that Tony Blair

Mr Blair said he believed the referendum outcomes were a result of a division between the people of Europe and its leaders.

He said European people were asking its political leadership what they had to say on jobs, the impact of globalisation, security, immigration and on organised crime.

Leadership questions

"I think in order to make progress we have to answer those in a clear way - and in particular we have got to show how you can have a new European social model for today's world," he told the FT.

That new model would have to address the impact of a modern world that allows a competitive economy with a just and fair society, he said.

Amongst the constitution proposals Mr Blair thought "perfectly sensible" was having longer term presidency - "You can't have a six month rotating presidency, it's impossible to do that."

He said the future funding of Europe had to be fair and he insisted Britain's rebate "is going to remain".

Conservative leader Michael Howard said: "I do think it's very important that we don't get this constitution, or bits of it, through the back door.

"We were promised a say.... I don't believe you should have any significant constitutional change in the European Union without a referendum.