Blair's new euro hint

Mr Blair is close to many of his European counterparts

Tony Blair has given his strongest signal yet that joining the euro would be in Britain's interests.

In a speech in Birmingham he talked of the tragedy of past British politicians failing to appreciate the reality of European integration.

His remarks are being seen as part of an attempt to soften up public opinion ahead of a possible euro referendum.

The tragedy for Britain has been that politicians of both parties have consistently failed to appreciate the emerging reality of European integration

Tony Blair

The prime minister told the European Research Institute that the UK should have joined the Common Market from the start - instead Britain's national interest was failed.

Attacking the "embarrassingly long history of Euroscepticism", Mr Blair said it was time the UK "adjusts to the facts" that its future lay in Europe.

But he insisted key economic tests must be met before there was a referendum on euro entry.

Downing Street has denied reports that Mr Blair has postponed a referendum on joining the single currency until 2005, to coincide with a general election.

The Sun newspaper claims the prime minister "privately signalled" the decision ahead of his speech on Friday.

British tragedy

But a Downing Street spokesman said the government's policy remained unchanged, adding: "No date for a referendum has been set, because there has been no assessment. The Sun's report is totally erroneous."

Mr Blair's speech began dramatically as a member of the audience collapsed and was carried from the room.

But the prime minister soon returned to the podium saying the man, Birmingham University's Professor Willie Patterson, was on his way to hospital but was not seriously ill.

Mr Blair argued the history of the UK's post-war relationship with Europe was one of "opportunities missed in the name of illusions".

Blair speaks of a history of missed chances

"The tragedy for British politics - for Britain - has been that politicians of both parties have consistently failed, not just in the 1950s but on up to the present day, to appreciate the emerging reality of European integration.

"And in doing so they have failed Britain's interests."

"Reversing that failure of imagination, mapping out a new vision for Europe and Britain in Europe ... is the task of this government."

Mr Blair said the UK's refrain had been the same as it was left behind at every stage of European integration.

"We said it would not happen, then we said it would not work, then we said we do not need it.

"But it did happen and Britain was left behind.

Briefing journalists on the speech, Mr Blair's spokesman earlier denied the UK had missed out again by not joining the single currency in the first wave.

He said the UK was now seen differently in Europe and while not among the 12 euro zone nations, it could still have influence.

Mr Blair's case for Europe is being seen as an attempt to prepare the ground for entering the euro, which comes into circulation in January.

No threat

But most of the speech did not address the issue of the euro directly and instead featured a passionate plea for a stronger British role in Europe.

He said it was vital for countries to work together, as shown by the enormous benefits for security and trade gained by EU membership.

But that enthusiasm for Europe did not mean the UK should be "uncritical", said Mr Blair, as he stressed the need to reform "slow and secretive" decision making in the union.

The prime minister also rejected the idea that the UK has to choose between its relationship with American and its ties with Europe - instead both were essential.

The speech is already being welcomed by pro-Europeans but will anger Eurosceptics.

Shadow foreign secretary Michael Ancram has dismissed the suggestion that the UK might lose influence if it did not join the euro.

Britain had played a powerful role in the current international crisis without being part of a common European foreign and defence policy, he argued.