Most commentators think Goldsmith & Co might win on a single currency referendum but lose a more general referendum on European integration as the public's irritation with Brussels would be outweighed by its collective fear of being left behind by the rest of Europe.Those who have worked closely with him in the past insist that the man is an acute strategist. "There will be a strategic goal," said one confidant hopefully, before conceding he had no idea what it was.One possibility, some associates venture, is that the Referendum Party is merely "a tactic in a longer-term strategy to re-orientate the right after an electoral defeat and even, possibly, after a split in the Tory Party". The leading psephologist Colin Rallings of the University of Plymouth reckons that if Goldsmith wins just 1.5 per cent of the vote (taking two-thirds of his votes from Tories) it would cost John Major 11 or 12 seats. His desire for some strong Euro institutions to supervise joint foreign, defence and environmental policies has provoked public fury from Conservative anti-Europeans and the rival Euro-sceptic UK Independence Party, whose leader Dr Alan Sked dismissed it as "the politics of Sunset Boulevard practised by an ageing playboy plutocrat".Nor are the Tory right in sympathy with Goldsmith's attacks on the damage done to the Third World by Western culture, which reflect his dark green ecological views. He won a seat in the European Parliament having formed a new party, L'Autre Europe, which secured 13 other MEPs. They have formed an alliance with a Danish and a Dutch MEP to form the anti-federalist Groupe Europe des Nations, of which he is president.This protectionism is anathema to the right in the UK whose economics have long been steeped in the free-market liberalism of Adam Smith and David Ricardo.

Goldsmith is in favour of a European free market surrounded by a tariff wall. He does not share most Euro-sceptics' desire to see Britain as the "Hong Kong of Europe", competing in the world market unfettered by European regulations. The social divisions that this will cause will be deeper than anything ever envisaged by Marx..."The opening up of world trade to the four billion low-wage workers in China and East Asia threatens not just the economic prosperity of the West but its social cohesion, he warned, echoing fashionable communitarian ideas as well as Pat Buchanan's populism. All this has gone down terribly well in France where the protectionist response to "filthy foreigners who pinch our jobs" is far more politically respectable than it has ever been here. In mature societies, we have been able to develop a general agreement as to how it should be shared ... Overnight that agreement will be destroyed by the arrival of huge populations willing to undercut radically the salaries earned by our workforces.

Three years ago he published The Trap, a tract arguing against the received wisdom on free trade:"Global free trade will shatter the way in which value-added is shared between capital and labour ... Given his track record as an investor, it's probably worth betting on him being profound.The political philosophy he developed after leaving business was a reaction against the globalisation of markets from which he had profited so hugely and yet which he had begun to suspect would eventually self-destruct. America has Steve Forbes, the multi-millionaire presidential candidate, following the path pioneered by Ross Perot Italy has had Silvio Berlusconi and France Bernard Tapie. Certainly Sir James is as formidable an eccentric as any of the others. The son of a Tory MP, he started making money while still at Eton, winning pounds 8,000 on the horses.

He went on to make an estimated $2bn as an international deal maker before deciding that the market was a house of cards and presciently selling most of his companies in 1987 - just before the Wall Street crash.Sir James is also formidably clever. Like many men who have run large business empires, he likes to deal in apparently simple, sweeping generalisations that could either be profound or mundane. Yet Sir James is not a Euro-sceptic with more money and idiosyncrasies than most On many issues he holds radically different views. What is as yet unknown, and troubling for Mr Major is just how powerful Sir James could be, not just this week as the Tory party debates what position Britain should take in the forthcoming Inter-Governmental Conference on the future of the European Union, but over the next few months in the run-up to the election.Sir James Goldsmith is the British version of the Nineties businessman- turned-politician. They fear that a referendum candidate could cost them 1,000 votes or more and make their seat more vulnerable to a Labour swing.