On 1 January 1999, 11 European states will start using the single currency. But a UK parliamentary committee set up two months ago to look at the euro is yet to meet.

Malcolm Bruce: Euro preparations committee hasn't met yet

Liberal Democrat Treasury spokesman Malcolm Bruce attacked Chancellor Gordon Brown for failing to give the Euro Preparations Committee its terms of reference.

He said recent events threatened to undermine the government's ability to take a lead on the issue.

Malcolm Bruce: Worried by loss of Mandelson from government

"What worries us at the moment is that with the departure of Peter Mandelson, who was an enthusiast for the euro, your left only with the Chancellor, Gordon Brown, who is pro-euro, and he's disappeared at the moment," Mr Bruce said.

He told BBC Radio 4's Today programme the Lib Dems want the committee to ready the UK for signing up to the euro as well as implementation abroad.

"We want the government first of all to resolve the problems over the euro preparation committee, which Gordon Brown announced a couple of months ago and which has not yet met even though it's supposed to be preparing the way for the euro, which starts in three days time.

Malcolm Bruce: Government should prepare for Euro, regardless of Labour euro-scepticicsm

"Secondly, we want some clarification from the government that the committee will not only prepare the way for the euro in the other 11 members who are founders, but also that we will be putting in place the measures that would be necessary to enable Britain to have the option of joining should we decided it's in the national interest to do so.

"We think it's sound practical common sense to be in a position to join if it's the national interest to do so."

John Redwood: Preparations should not run ahead of political will

Shadow Trade Secretary John Redwood, who speaks for the Conservative on the euro, disagreed.

He said the government should not prepare to sign up to the euro until it had won a firm commitment to do so in practice.

"It would be quite wrong of them to spend any public money on preparing for the euro before they've persuaded Parliament and the public it's right to do so," he said.

John Redwood: Britain doesn't want public money spent on Euro-preparations

Business had already succeeded in getting ready for the euro as a new foreign currency, he said.

"Most sensible businesses dealing with the continent have already made their preparations - the government is months behind the game."

But Mr Bruce, quoting a recent poll suggesting 80% of people think UK participation in the single currency at some stage is now inevitable, described the Tories as out of step.

"What we find quite extraordinary is that for a party like the Conservatives that used to be the party of business should rule out the possibility of being prepared to join - in our view that makes them not really fit to represent business."

The Lib Dems are also calling on the government to require the Bank of England to produce a twice-yearly report on the economy and Europe.