Lord Mandelson was a European Trade Commissioner for four years
Lord Mandelson has denied telling the head of the European Commission the UK was ready to join the euro.
Jose Manuel Barroso sparked feverish speculation after saying he had spoken to UK politicians about the idea.
But Lord Mandelson who worked with Mr Barroso for four years rejected claims the EC President was referring to him.
The business secretary said he still favoured eventual UK entry but could not remember speaking to Mr Barroso about it recently.
He told BBC Radio 4's Today programme: "I haven't had a discussion in my memory, with Mr Barroso about this.
"I think I might have exchanged words when I first went to the Commission in 2004 but not since, no.
"My view is that the government is right to maintain a long-term policy objective of taking Britain into the euro, but it's not for now."
In an interview with French radio, Mr Barroso said the UK was "closer than ever before" to joining the euro.
Hs said that British politicians were considering the move because of the effects of the global credit crunch.
But Downing Street said its position on the single currency remained the same and that it had "no plans" to join.
"Our position hasn't changed... we have no plans to join the euro," No 10 said.
In 1997 Gordon Brown, seen as less keen on the euro than Tony Blair, set five economic tests which had to be met before ministers would recommend UK euro entry and holding a referendum.
The key test is whether the UK economy is coming together with those of countries in the eurozone and whether this can be sustained in the long-term. The second test, linked to this, is whether there is sufficient flexibility to cope with economic change.
'Closer than ever'
The remaining three tests assess the impact of joining the euro on jobs, foreign investment and the financial services industry.
Opinion polls have suggested that any vote on scrapping the pound and adopting the euro would be lost, and in the UK the currency has not been a significant political issue for years.
In his interview Mr Barroso acknowledged "the majority" of British people continued to oppose joining the eurozone.
But he said the recent economic uncertainty had made the currency a far more attractive option.
In the RTL radio/LCI television broadcast, the former prime minister of Portugal said: "We are now closer than ever before.
"I'm not going to break the confidentiality of certain conversations, but some British politicians have already told me, 'If we had the euro, we would have been better off'."
He said the current poor economic situation had emphasised the importance of the euro to the UK, but added he believed a move would not take place in the immediate future.
"I know that the majority in Britain are still opposed, but there is a period of consideration under way and the people who matter in Britain are currently thinking about it," he said.
The value of sterling compared with other currencies has fallen during the credit crunch, and the UK government has had to spend massively in recent months to try to support the economy.
A Downing Street spokesman said: "We have no comment on this. Our position on the euro is the same. We have no plans to join the euro."
The UK's opposition Conservative Party opposes adopting the euro.
Shadow foreign secretary William Hague said: "It is extraordinary that certain politicians are whispering to the EU Commission about joining the euro behind the British people's backs.
"Keeping the pound is vital for Britain's economic future. We need interest rates that are right for Britain, not the rest of Europe. There are no circumstances in which the next Conservative government will propose joining the euro."