The Council of State last week said in an opinion that there is no legal requirement for a referendum since the new EU treaty does not include "constitutional" elements.

Europe minister Frans Timmermans said after Friday's meeting that the government had had a "good discussion" on the Council of State report. "But good and very extensive advice also deserves a good and careful reaction," he stated according to ANP press agency.

Dutch newspaper NRC Handelsblad writes that the government's failure to take a decision on Friday points to internal divisions in the cabinet.

Prime minister Jan Peter Balkenende, a Christian Democrat, was hoping to convince his coalition partners - the Labour Party and the small Christian Union - that a treaty poll is not necessary by pointing to the Council of State's advice.

But Labour ministers are reportedly under strong pressure from their party's parliamentary faction to back a referendum, with Labour's parliamentary leader Jacques Tichelaar publicly promoting the idea.

Prime minister Balkenende indicated that the cabinet will decide its position on the issue in a meeting this Friday (21 September).

NRC Handelsblad writes that Labour could be convinced to drop its calls for a referendum if it gets concessions on other hot Dutch political issues - such as lay-off rules and the Dutch military mission in Afghanistan.

The Council of State's advice is not binding for the Dutch parliament, which could decide to hold an own-initiative referendum even if the government were to oppose this.

It was the Dutch parliament which - against the wishes of prime minister Balkenende - organised the 2005 referendum on the EU constitutional treaty, which ended in a resounding "no" vote.

In the parliament's lower house, there could be a majority for a second treaty referendum, if Labour MPs vote in favour.

But a referendum bill could eventually be blocked in the senate, which is more conservative in its composition. Christian Democrat and Liberal senators are seen to be against having a referendum.

EU nervousness

The debate in the Netherlands is meanwhile being followed closely by observers in Brussels.

A second Dutch referendum could possibly lead to a second Dutch "no", amid claims by critics saying that the reform treaty is largely similar to the EU constitution which both Dutch and French voters rejected in 2005.

Another "no" could spark an unprecedented crisis on the EU stage following two years of intense political manoeuvring to overcome the failure of the constitution.

Also, if the Netherlands were to hold a fresh EU treaty poll, this would boost calls in other member states - such as the UK and Denmark - to do the same.

UK liberal MEP Andrew Duff last week released a statement on the Dutch Council of State report saying "The Treaty certainly deserves careful and informed scrutiny by the Dutch parliament, but I hope that the Dutch government and parliament now confirms that there will be no referendum in the Netherlands.

"This is not the first time in their history that the Dutch have taught the British a good constitutional lesson."