Euro heats UK tempers

Does Blair want to follow the others into the eurozone?

The Conservatives have accused Prime Minister Tony Blair of conducting a phoney war over the euro, just two days before notes and coins hit the streets in the 12 eurozone member countries.

In an article in the Independent on Sunday, Tory leader Iain Duncan Smith accused Mr Blair of using "furtive manoeuvring to bamboozle the British people" into giving up the pound.

The criticism came soon after Mr Blair said in his New Year Message that a successful euro would be "massively" in the interest of Britain.

Mr Blair also said the government supported the euro and would want the UK to enter if its five economic tests were met and if the British people were to vote 'yes' in a referendum.

Time to decide

The Liberal Democrats, which are in favour of the euro, also went on the offensive, insisting that Mr Blair should name a date for a referendum on whether the UK should join the currency.

In an interview with BBC Radio 4's World This Weekend, Liberal Democrat leader Charles Kennedy dismissed the government's five economic tests as a "fig leaf" that would allow it to put off a referendum decision.

The Conservative former Deputy Prime Minister Lord Heseltine agreed, charging that Mr Blair should tell the backers of the euro: "Follow me over the top."

Wait and see

The government said it would not be rushed into a decision.

Instead, it would continue to exercise "euro-caution", according to Europe minister Peter Hain.

"The only real date people ought to bear in mind is within about 17 months, when the Chancellor's economic assessment is completed."

Only then would the government set a date for a referendum.

Eyes wide open

Mr Hain hit back against the government's critics insisting that it would be "untenable" to "close your eyes and rush in now, regardless of whether it is good for Britain" as advocated by Lord Heseltine and Mr Kennedy.

Mr Duncan Smith's position, "to close your eyes and stay out forever, regardless of whether it is good for Britain" was also untenable, Mr Hain said.

While the government had its "eyes wide open. We are applying a common sense, cautious approach to this to see whether it is in Britain's economic interests", he said.