Nick Reilly, the chief executive of the US-owned Vauxhall Motors, said that if there was "any indication we are not going to get into Emu (European monetary union) sooner rather than later, then that is going to affect future investment decisions."

He said that he personally wanted the government to accelerate its efforts to ensure that economic conditions were right to allow Britain to join.

"I think the sooner the better because investors looking at Europe from the outside will see Britain as very much outside Europe if we are not in Emu," he said.

Mr Reilly also warned that conditions in the car industry were going to get tougher, with over-capacity in Europe of around 20-25%.

"When you get that situation, you have got to expect mergers or closures," he warned.

Other car companies agree

Jobs could be at risk in the car industry

Ken Jackson, general secretary of the engineering union AEEU, said that thousands of jobs could be at risk throughout the UK car industry if it fails to join the single currency.

He said that Ford, Toyota, Nissan and Honda share Vauxhall's concerns.

"Major carmakers acknowledge Britain's decision to remain outside the single currency's first wave will have serious consequences for future UK operations," he said.

Rover, which is owned by Germany's BMW, has blamed the high pound and the UK's decision to stay out of the single currency for the recent problems at Longbridge.

A Rover spokesman said the company had always been a strong advocate of the single currency "because we think there are big benefits to be had."

Business split on euro

UK businesses are deeply divided about entry into the single currency. While large manufacturers are generally in favour, many smaller businesses are more sceptical.

The Confederation of British Industry has said that its members are in favour of joining the euro, while other industrialists have set up an anti-euro pressure group led by Lord Marsh.