With the EU constitution looking all but dead, Britain -- which takes over the rotating EU presidency in July -- held out hope Tuesday that some of its key elements can yet be salvaged.

The fate of the constitutional treaty -- roundly defeated in French and Dutch referendums -- will be hanging in the balance when EU leaders gather in Brussels next week.

It certainly looked doomed after Britain, ignoring French and German pleas for nation-by-nation ratification to continue, announced Monday that it was suspending plans for its own referendum.

But in a significant turn, Prime Minister Tony Blair argued in a newspaper interview that some parts of the constitution must be salvaged if the enlarged, 25-nation European Union is to run properly.

"I'm not saying I've suddenly woken up and decided the constitution is the wrong thing for Europe to do," he told the Financial Times, the de facto newspaper of record among Brussels eurocrats.

"It's a perfectly sensible way forward, and at some point Europe is going to have to adopt rules," he said, citing as an example the creation of a full-time EU president to replace the current system of rotating national presidencies.

"We have got to turn this into an opportunity for Europe," he added.

British Foreign Secretary Jack Straw took the case a step further, saying that key elements could yet be adopted, such as modifying the voting muscle of each EU member state and a setting out a greater role for national parliaments.

What is more, he told BBC radio, such moves could be implemented without calling a referendum in Britain, where opinion polls have reflected widespread popular opposition to an EU constitution.

"It would be absurd, if we could find a way of strengthening the role of the British House of Commons over EU legislation, to say that had to go to a referendum," Straw said.

It is up to EU leaders to decide in Brussels on June 16-17 how to deal with the European Union's worst-ever political crisis, but it will be left to the British EU presidency to come up with some alternative ideas.

In Strasbourg, a pall of gloom hung over the normally vibrant European Parliament as it reconvened in the French city for the first time since the French and Dutch "no" votes.

"We are all feeling a bit lost," said Hans-Gert Poettering, leader of the conservative European People's Party group. "We mustn't lose our sense of direction. When you are in a crisis, you have to keep a cool head."

Martin Schulz, leader of the Socialist group, said: "We've tried to come to grips with what's going on. All sorts of messages were being sent out. Our (own) political family had voters who said 'no'."

The outgoing Luxembourg presidency tried to strike a tone of business as usual, saying that despite the constitutional deadlock, it was determined to get a deal on another thorny issue -- the EU's spending plans for 2007-13.

"This issue is one of the most important facing the Union right now. It comes at a time when the Union cannot afford any more failures," said Nicolas Schmit, a senior Luxembourg official.

Six top contributors to EU coffers, including Germany, France and Germany, want spending capped at 815 billion euros (1.042 trillion dollars) over the seven-year period, while the European Commission wants one trillion euros.

In Washington for talks with US President George W. Bush, Blair said Tuesday that Britain will not use the EU constitutional crisis to lead the bloc to a more liberal and free market future.

"Leadership is only something that can be exercised in Europe with the consent of, and with the partnership of others," Blair told reporters. "It's not for Britain alone to provide leadership in Europe."