From the report of this morning's press briefing from the Prime Minister's Official Spokesman:
"Asked for a reaction to today's Telegraph report suggesting that our red lines on the European Constitution had been crossed, the Prime Minister's Official Spokesman (PMOS) said that as he had told journalists yesterday, we were in a real negotiation.
He drew their attention to the White Paper published last September which stated, "We will insist that unanimity remains for....key areas of criminal procedural law" (paragraph 66). Habeas corpus, trial by jury and the like were key areas of the criminal justice system and would not be changed. That was our bottom line. The particular route which the Constitution ultimately went down was a matter for negotiation".
There it is, that word "key" again. "We will insist than unanimity remains for ... key areas...". In other words, Blair is prepared to accept QMV for "non-key" areas of criminal procedural law.
In the Telegraph report this morning, Ambrose Evans-Pritchard claimed that the government had signalled that it was "willing to breach" the first of its "red lines" by agreeing to cede Britain's veto over sensitive areas of criminal justice.
He mentions Article III-171 in the draft constitution, as amended by the Irish presidency, which gives powers to the Council, inter alia, "to approximate criminal legislation to ensure the effective implementation of a Union policy in an area which has been subject to harmonisation measures".
If the harmonisation measures in question were adopted by QMV, then the "approximation" - i.e., harmonisation - of criminal law is also adopted by QMV.
Nothing in the PMOS's statement actually constitutes a specific denial that the goverment is not ceding this power to the EU. It all depends on what you mean by the word key. In view of the PMOS's evasion, however, the implications are that Article III-171 has been accepted - in principle, at least.