Euro battle revived by Blair speech

Euro notes come into currency next year

British entry to the euro is back at the top of the political agenda after Tony Blair gave his strongest hint yet that a referendum on the issue could be held before the next election.

In comments which have rekindled the debate on the single currency, the prime minister told the Labour Party conference the UK should have the courage to join if its key economic tests on entry were met.

You are using this opportunity where we are co-ordinating together to bring in a major political issue

Sir Stanley Kalms "No" campaigner

While the government policy remains unaltered, supporters of entry have welcomed what is seen as an important change in tone from Mr Blair.

In contrast, some backers of the "no" campaign have accused the prime minister of opportunism, claiming he was trying to take political advantage of the coalition against terrorism.

Mr Blair insisted to Labour delegates on Tuesday that the government's five economic tests on euro entry were fundamental, not just "window dressing".

But he continued: "If they (the five economic tests) are met we should join, and if met in this Parliament we should have the courage of our argument to ask the British people for their consent in this Parliament."

Mr Blair said before the election that the economic tests would be assessed within the first two years of this Parliament but his latest comments signal a change of gear on the issue.

On Tuesday, Foreign Office Minister Denis Macshane said now was not the time for "nit-picking" on Europe.

Changing opinions

He told Radio 4's Today programme: "The important thing is surely that as of 1 January the euro notes and coins are going to be in circulation and I think people's opinions will change.

Macshane: Now is not the time for arguments over Europe

"It is also a wake up call to British business and to the British public that at a time when there is unprecedented solidarity and support across the Atlantic for a common cause, now is not the time to get out the old, anti-European, isolationist arguments."

He maintained that Mr Blair's message was the same on the euro as had been planned for the TUC speech he had to abort when the terror attacks struck.

While the international crisis was at the core of Mr Blair's message to the conference, his remarks about the euro became a key talking point among delegates.

Slough MP Fiona MacTaggart told BBC Radio 4's Today programme that the difference was "the tone".

But some Eurosceptics in the party take a different view. Glasgow MP Ian Davidson thought the speech meant the referendum was further off than the two year deadline set for the economic tests had suggested.

"I think the prime minister recognises that the economic situation is likely to move against joining the euro with the next period."

Away from the Labour Party, some "no" campaigners have interpreted the remarks as the unofficial start of the referendum campaign.

Ex-Dixons boss Sir Stanley Kalms said he welcomed the chance of a referendum as the vast majority of people were against joining the euro, which would see the UK incorporated into a federal Europe.

Gordon Brown will make the economic assessment

"On the other hand it would be rather opportunistic.

"We have formed an excellent coalition with Europe to fight terrorism and I think this was rather political to bring together the issue of Europe and the possibility of a federal Europe."

There have also been contrasting reactions from the other main political parties.

Conservative shadow foreign secretary Michael Ancram told the BBC: "I was just surprised that at this time of international crisis when you're trying to bring people together, he should actually refer to something which he must know is divisive politically but also divisive right across the country as a whole."

Meanwhile, Liberal Democrat treasury spokesman Matthew Taylor said he was pleased Mr Blair had "started to make the case" for the euro.

The government's European credentials would depend on how vigorously it made that case.