A meeting of EU finance ministers in Brussels was told that the UK Government, which has not joined the project, is to "prepare and decide" on the euro.

The UK's ambassador to the EU, Sir Stephen Wall, offered the government's best wishes for the launch.

He said: "A successful economic and monetary union means growth and jobs for all Europe, including the UK."

'Take risks'

He was representing Chancellor Gordon Brown at talks to announce the locking together of the exchange rates of the 11 EU currencies that are moving to the euro.

Meanwhile, pro-Europeans have warned that the UK risks being "left out and left behind", as euro-sceptics, including Tory leader William Hague, re-asserted their opposition to a single currency.

Pro-European former Tory foreign secretary Lord Howe urged Prime Minister Tony Blair to "take risks" and set a date for joining the single currency.

Lord Howe: Prime minister should "take risks"

Lord Howe told The Independent newspaper: "The greatest risk to UK entry into the single currency lies not in the constraint of public opinion, but in the absence so far of sustained pro-Emu leadership from the government.

"Evasion, inertia or indecision are no substitutes for informing, educating and persuading the electorate about the strong merits of the single currency case."

Pro-European Tories would "back the prime minister in promoting the right policies for Britain", he said.

Mr Blair should set a target date for entry, perhaps January 2003, and say that if the economics were right, the referendum would be soon after the next election, said Lord Howe.

Decide after next election

The government is not planning to decide on joining the single currency before the next election.

The European Movement has also stressed areas where it said Britain would lose out by not being a founder member of the euro.

A statement from Labour peer Lord Hollick, head of United News and Media, said: "The euro area will enjoy lower and more stable interest rates than we have in Britain.

"Interest rates in the euro-zone were currently 3%, compared with Britain's 6.25%. If Britain joined, the cost of investment would fall."

European Movement vice-chair Ian Taylor, the Tory MP who left his party's frontbench in protest at its anti-euro policy, said the UK faced being left behind.

He said: "The danger is that by self-imposed exclusion, our political influence on major economic decisions in Europe will be gradually eroded."

But Mr Hague, in his New Year message, accused the government of "going with the flow of European integration".

John Redwood: "A huge price to pay"

Euro-sceptic shadow Trade Secretary John Redwood, in his New Year message to business, said British euro membership was "far from inevitable".

Many businessmen had wanted the pound to be in the Exchange Rate Mechanism for the sake of stability but found there was a "huge price to pay" in soaring interest rates, tax rates and unemployment, he said.

Emu also had "a big price tag" - the risk of high unemployment and taxes.

Veteran Tory Euro-sceptic backbencher Sir Teddy Taylor issued a circular to friends warning that the 11 euro nations were heading for "economic disaster and social unrest".

He predicted the euro would fail, as had the ERM.

The Liberal Democrats, meanwhile, are impatient with Labour for keeping its options open on joining the euro.