LONDON -- It is a subject that most pragmatic politicians in Britain, including the prime minister and the front-runner for the leadership of the Conservative opposition, would prefer to ignore. Since the Tories were led toward electoral defeat in June by their obsession about Europe, the political establishment wants to banish the "E" word from its lexicon, encouraged by polls showing that it was among the lesser concerns of voters in the general election in June.

For Labour, Prime Minister Tony Blair hopes he can deliver better public services in his new term -- in health, education and transport -- to meet growing popular discontent. On the Tory side, the front-runner for the leadership, Kenneth Clarke, and his rival, Iain Duncan Smith, say they could run things better. But despite those polls that report the people are not too worried about their country's relations with the other members of the European Union, British politics are hung up on the cross-Channel issue.

It is no secret that Blair would like to lead Britain into the euro monetary zone during the coming four years. He has promised a referendum on the issue, though the date remains vague. He has good reason for caution; the opinion polls show that, on this aspect of European policy, a sizable majority of the electorate is against joining the common currency, with the strength of sterling and the need to bring it down to a more reasonable entry level adding a considerable complication.

The powerful finance minister, the chancellor of the exchequer, Gordon Brown, is seen as, at best, lukewarm toward such a project. Brown has laid down five economic criteria he believes must be satisfied before the government can recommend a "yes" vote at a referendum. This puts the prime minister in thrall to the chancellor, who thinks he should have become Labour Party leader rather than Blair before their party's great victory of 1997.

Thus personal politics at the highest level of government interfere with the most important external question facing Britain: whether it joins the euro or remains a semi-detached partner playing out a trans-Atlantic vocation alongside its European role. But the same is so on the opposition side.

Kenneth Clarke, a former chancellor of the exchequer who topped the poll among Conservative members of Parliament, is an unabashed pro-European. When he emerged as front-runner in the contest for the party leadership, sterling dipped because markets thought the prospects of Britain joining the euro had been enhanced.

Clarke's opponent in the coming poll of party members for the leadership, the rightwinger Iain Duncan-Smith, is so much in the opposite camp that some commentators think that -- as well as ruling out euro membership -- he might flirt with Britain's departure from the EU it joined three decades ago.

For the Conservatives, anti-Europeanism is an easy means of arousing the Little England vote -- the British who love to spend their holidays in France or Italy but who hark back to the glory days of their country standing alone against Hitler in 1940. To combat that, Clarke will have to overcome decades of feeling whipped up by Margaret Thatcher's black-and-white characterization of Britain vs. the Europeans in rows over the budget and national sovereignty. No wonder he would like to bury the issue in the interests of unity, but this may be hard as the gloves come off between him and Duncan Smith before party members vote for their leader in September.

Much as the prospect of division in the opposition should comfort him, Blair faces a major problem, too. While he trounced the Conservatives at the general election in June, the abstention level hit record heights -- showing a distinct lack of popular enthusiasm for his administration. On a wider scale, as British policy planners say, the danger is that Europe is moving ahead, and taking a shape that risks leaving London on the sidelines caught between its links with the continent and the old relationship with the mega-power across the Atlantic.

Under former U.S. President Bill Clinton, the Democrats and Blair's New Labour sang from the same song sheet, seeking their third way between the right and the old left. Now Blair has to deal with President George W. Bush, who has made it all clear that he is a different kettle of fish. Britain may join in bombing Iraq and make understanding noises about the Kyoto treaty, but if Blair wants to be a true member of the European faith as defined by Germany and France, he faces awkward decisions, as would Clarke in the future. Caught on the edge of Europe and the Atlantic, Britain is facing decisions about its foreign relations that its politicians will find hard to duck.