His speech in Brussels, which will be followed by another at a union conference on Wednesday, puts the former Cabinet minister at the front of the campaign to take Britain into the euro.

His enthusiasm for the single currency is in marked contrast to the official line from Downing Street.

Prime Minister Tony Blair has now agreed to front the Britain in Europe campaign - but only on the condition it waters down its focus on the euro.

The BBC's Robin Oakley: "Peter Mandelson went high profile again"

Mr Mandelson told his audience the government should not worry about the Conservative Party's success through campaigning on a Eurosceptic platform in the European elections.

Only 8% of the British public had actually turned out and voted for the Tories, he said.

The euro is "is not about building a federal super state", Mandelson says

"This hardly suggests that the British public regard Europe as a stake aimed at the heart of our national and individual lives.

"I believe the election defines a frontier beyond which hardline Euroscepticism will not pass."

He claimed visionary status for the euro's pioneers, suggesting the United Kingdom risked being left behind if it remained outside.

"The single market and the euro are the right responses to today's world.

"It is not about building a federal super state or a government in exile, but a Europe with a capacity for united political action where this is useful and needed."

Benefits for all Britons would include lower prices, cheaper finance and increased investment, Mr Mandelson said.

His speeches will heighten speculation that he is to act as the government's advocate for Europe, taking a key role in the debate over whether the UK should adopt the single currency.