"Let the issue be put. Let the battle be joined," Blair told a raucous House of Commons, as he confirmed Britain's first national referendum since 1975.
Blair set no date for the poll, but signaled it would not be held for at least a year, as the treaty must first be agreed by EU leaders and debated in Parliament. That would most likely put the referendum after a national election expected next May.
Blair said he hopes a referendum will foster a balanced, sensible public debate on whether Britain should integrate more closely with the EU.
But it is a high-risk strategy. Opinion polls suggest the result will be tight and if Britain votes "no" it could delay or scupper the constitution, which requires ratification by all 25 EU states, and force the ardently pro-European Blair to resign.
The issue of European integration has bedeviled Britain for decades, finally brought down Conservative Prime Minister Margaret Thatcher in 1990, and caused divisions within all the main parties.
"It is time to resolve once and for all whether this country, Britain, wants to be at the center and heart of European decision-making or not; time to decide whether our destiny lies as a leading partner and ally of Europe, or on its margins," Blair said. The galleries in the Commons roared with shouts of disapproval from the opposition bench.
Denmark, Ireland and Luxembourg have already announced they will hold referendums on the constitution and several other countries, including The Netherlands, Poland, Italy, Spain and Portugal are likely to do so.
German Chancellor Gerhard Schroeder said Blair's plan was a "sovereign decision," that he wouldn't comment on. Blair "will know exactly why he is doing that, and will certainly see to it that in relation to Europe there will also be success," he said.
Swedish Prime Minister Goeran Persson, who does not plan to hold a referendum, said he would not be influenced by Blair's decision.
"I think we're entering dangerous ground if we take that kind of decision-making away from Parliament and put it up for referenda," he said.
The constitution, currently being negotiated in Brussels, Belgium, aims to streamline decision making in an EU which enlarges in May. It aims boost the bloc's role on the world stage by creating an EU president and foreign minister. It also proposes closer defense cooperation.
For months, Blair dismissed calls for a referendum, and continues to say the treaty will not fundamentally alter Britain relationship with the EU. The government discussed a referendum only as it applied to the separate question of whether or not to join the euro.
His about-face, the most significant since he came to power in 1997, follows months of pressure by euroskeptical newspapers and the main opposition Conservative Party, which claims the treaty will undermine Britain's powers over criminal justice, tax and foreign policy.
Conservative leader Michael Howard welcomed Tuesday's announcement, saying Blair had "at long last seen sense on this issue." But he ridiculed the prime minister for saying last year that he had "no reverse gear."
"Today you could hear the gears grinding," Howard said to roars of approval from his lawmakers. "Who will ever trust him again."
Howard said the treaty, which EU leaders hope to sign in June, would mean "greater centralization, more regulation and less flexibility. It is the exact opposite of what Europe really needs."
The British public is largely ambivalent or skeptical about the EU — an attitude born from an island mentality, memories of two world wars and strong Anglo-American ties.
Sections of the British press have also fanned europhobia over the years, with stories of Brussels bureaucrats planning to ban curved bananas and requiring fishermen to wear hair nets.
"All of it, nonsense, myth designed to distance people's understanding of what Europe is about and loosen this country's belief in its place in Europe," said Blair Tuesday.
"It is going to be a difficult challenge for him (Blair)," said Richard Whitman, a Europe analyst at the Royal Institute of International Affairs.
"There has been a build up of skepticism and in some quarters of the media outright hostility and that will be difficult for him to turn around."
However, unlike his political gamble over the war in Iraq, in the referendum Blair can count on the support of most of his Labor members of parliament.
The nationwide referendum will be the first of its kind since 1975, when Labor Prime Minister Harold Wilson consulted the public on Britain's continued membership of what was then the European Common Market.
That referendum endorsed Britain's membership with a 67 percent "yes" vote on a 65 percent turnout.
It is not clear how Blair's announcement of the referendum for the EU constitution will affect the timing of any vote on the euro. Britain, Sweden and Denmark are the only EU members that do not use the common currency.
The general election could come next May, but British elections are not on a fixed schedule. Instead, the governing party must call one no later than five years after the most recent vote. Blair's government was reelected in the June 2001.