A report by a commission of Conservative economic experts, appointed by party leader William Hague, has predicted dire economic consequences if Britain signs up to the European single currency.

John Nott: Euro is "greatest single issue of our time"

Former defence minister Sir John Nott, who chaired the Commission on the Pound, told the Conservative conference that economic and monetary union was the "greatest single issue of our time."

Sir John warned that if the party lost its fight to preserve the pound "all is lost for our nation".

He accused the government of being stuck in a "post-war timewarp" in its economic thinking.

Blair 'has no radicalism'

Labour failed to appreciate how the euro would hold Britain back from making the most of its natural advantages in the new era of Internet shopping, he claimed.

Tony Blair: Dismissed as "a trendy middle-aged man"

Rejecting the suggestion that Prime Minister Tony Blair was a "modern man", Sir John said the prime minister was "far more conservative than any former Tory leader I have known. He has no radicalism in him."

He added: "In fact he is a trendy middle-aged man, former lawyer, who doesn't realise that the world is changing very fast

"The Internet and the coming revolution in e-commerce are making trading and currency blocks redundant.

"To survive in this new global world Great Britain must remain independent, flexible, liberalised and adaptable, all the things that the present European Union is not.

'City hub of revolution'

"The City of London, where I have spent half my working life, is at the hub of this new global revolution

Mr Nott says the euro would mean extra regulations for the City

"It has great skills and infrastructure. It is in the right time zone It has the great advantage that 80% of the world's electronically stored information is in English.

"It is the world's greatest offshore financial centre precisely because it is independent of any single major currency.

"And I have to say to my City friends that if this country was to go into the euro all sorts of regulations would be thrust on the City of London of which they are now free."

Euro 'fact of life'

Sir John, who is chairman of Hillsdown Holdings, insisted he and the other members of the commission were "good Europeans" who "believe in the EU" and wanted to see it prosper.

He acknowledged the euro was a fact of life but said it had "fatal flaws" and would be "kept on life support by politicians long after it is brain dead economically".

Sir John said: "We should remain committed and active members of the EU because ultimately, the union of the peoples of Europe is about the maintenance of peace on our continent.

"But, with our rather separate political and economic history, our global reach - particularly in the services - and our huge overseas investments, the majority outside the EU, it would be folly to give up what remains of our economic independence by joining the European single currency."

The euro project meant "a slow but unstoppable move to a single government, to European political union", he warned.

"To pretend otherwise to the British people is a deceit."

Tory divisions

Mr Nott was given a standing ovation for his speech.

William Hague: Pledging to save the pound

Mr Hague also took up many of the same themes in his close-of-conference address.

He committed the Tories to fight the next general election with a promise to keep the pound.

However, there was fresh evidence of Tory divisions on the euro when it emerged that John Major had predicted that Britain would join the single currency if it was a success.

The comment made by the former prime minister in a lecture in the US was reported by The Independent.