Pro-euro bosses press Blair

The euro debate is intensifying

Pro-euro bosses are urging Tony Blair not to rule out joining the single currency before the next election.

Twenty-six of some of the biggest companies and top business leaders have signed a letter setting out their case.

The signatories include Sir Chris Gent, chief executive of Vodafone, Peter Sutherland, chairman of BP, and Lord Simon of Highbury, the former Treasury minister.

Their plea intensifies the euro debate ahead of the Treasury's assessment - expected before 7 June - of the five economic tests for entry.

In his statement, Chancellor Gordon Brown is expected to say Britain is not ready.

'Economic damage'

But Mr Blair is under growing pressure from the pro-euro lobby to set a date for a referendum on the issue, before the end of this parliament.

Although in many respects, Britain is a good place to do business; non-membership of the euro is damaging that position.

The letter in full

The letter, also backed by senior executives from Ford, Boeing and Siemens, says: "The working assumption of business has been Britain is a 'pre-entry' country.

"If it becomes apparent that this is no longer the case, the government must be aware that will constitute a significant change in the business climate of this country."

The business leaders say the conditions are right to join now and staying out of the eurozone would do lasting damage.

Their view is not representative of British industry as a whole.

'Rule out entry'

The president of the CBI, Sir John Egan, is a euro-sceptic who has said business backing for the single currency is fading.

If the UK government says we are not going into the euro for a long time it will cause serious damage to the manufacturing base

Alan Wood, Siemens UK

Head-to-head: Business and the euro

James Frayne, campaign manager of the anti-euro No Campaign, said: "The eurozone economy is suffering massive unemployment and slow growth, so it's not surprising that two-thirds of British businesses oppose joining the euro.

"The CBI, the Institute of Directors, and the British Chambers of Commerce have all said that business wants to avoid uncertainty, so the government should admit that the tests have not been met, and rule out the euro for this Parliament."

On Sunday, the Leader of the Commons, Dr John Reid, told ITV1's Jonathan Dimbleby programme that there was no question Britain was going to join.

"[Mr Brown's statement] is a decision for now, it doesn't bind us for any specified period in advance because the decision we are taking is not whether we will join the euro but it is when we will join the euro."

'Sixth test'

The Chancellor has also attempted to reassure euro supporters he would back British membership of the single currency under the right economic circumstances.

He told GMTV: "I have always been pro-Europe. And by history, by geography, by economics we are very much part of Europe."

But Cabinet tensions on the issue are reportedly running high.

Scottish Secretary Helen Liddell stirred controversy by saying she wanted a "sixth test" for euro entry, assessing the impact of not joining.

In a newspaper interview, she said she was worried about the impact of staying out on the Scottish economy.

'Factional fighting'

She later dismissed "absolutely and utterly bizarre" suggestions her comments had been a calculated attack on the Chancellor.

"The idea that I have been put up to this by Number 10 is absolutely and utterly bizarre and sometimes I wonder about the knowledge and experience of the people who make these claims," she told BBC Radio Scotland.

The prime minister's official spokesman said it was well known that there has been intense discussion between the Prime Minister and the Chancellor over the euro.

But he insisted the issue would be discussed at Cabinet before a final decision on a referedum is made.

Shadow Chancellor Michael Howard said government splits on the euro were harming the national interest.

"The government is split from top to bottom, just as it was on Iraq," he told Today.

"The damaging reality is that the decision is not being made on the basis of what is best for Britain, but on the outcome of this factional fighting that is tearing the government apart."

Meanwhile, the director of cross-party pro-euro group Britain in Europe, Simon Buckby, has warned it will collapse unless the government calls an immediate referendum on euro entry or, at least, promises to do so during this Parliament.