In a speech to the American Enterprise Institute in Washington, the former Conservative Defence Secretary will hammer home the euro-sceptic view that a "headlong rush" into a single currency would be "perilous".

Mr Portillo and fellow euro-sceptics see the new currency as the foundation of a new European state - which they say would lead to the imposition of common EU policies on Britain and an end to the 'special relationship' with the US.

He spoke of a "sense of grievance" and a "source of bitterness" among europeans, stemming from the reduction of democracy created when economic policies were decided at a level higher than nationally-elected governments.

'Anti-american' policy

Mr Portillo, who lost his Enfield seat at the 1997 election, will highlight the fact that EU states failed to reach agreement on the Falklands War, South African apartheid, the Gulf War and subsequent policy towards Iraq, and Bosnia. He suggested that in a Europe speaking with one voice, those countries like Britain, who have traditionally supported the US, may no longer be able to offer them their support.

A future european common foreign policy could be "un-American" or even "anti-American".