Danish vote rocks Blair

The euro vote will cast a shadow over British entry

By BBC News Online political correspondent Nick Assinder

Tony Blair's hopes of taking Britain into the single european currency have suffered a serious setback with the Danish "no" vote.

Mr Blair will almost certainly be forced to think twice about his current policy

The prime minister has insisted that he will not change his position on the euro, and that he will only call a referendum on entry once the economic conditions are right.

But the task of winning over voters in time for a poll early after the next election is now going to prove much more difficult.

And whatever Mr Blair says in public, it is highly likely that he is now being forced to re-think his entire timetable for euro entry.

New weapon

The Danish vote is likely to further undermine the ailing currency, and that could well delay the time when it would look in Britain's interests to join.

Meanwhile, the "no" campaigners in Britain - led by William Hague - have been given a powerful new weapon.

They will be able to argue that entry into the euro is no longer an inevitability.

And they will insist that there is now no reason why Denmark, Sweden - which may also vote no in the wake of the Danish result - and Britain cannot operate successfully outside the euro.

That will raise major fears in the "yes" camp that a two-tier Europe could evolve, with the "ins" powering ahead towards full economic union, while the "outs" are left isolated in the slow lane.

Mr Hague will be even more determined to make the issue the central plank of his general election campaign

He already believes his "Keep the Pound" campaign chimes with ordinary voters, and will hope the Danish vote has given them greater confidence to reject British entry.

The prime minister may try to play down the significance of the result, and there are certainly those who believe it will have no real affect in the UK.

Greater threat

They argue Denmark is a tiny country with a population smaller than London's and a long tradition of individualism within the EU.

The no vote will not lead to the death of the euro, and the financial impact in the short-term may well be limited. A far greater threat seems to be the euro's slide on the markets.

But Mr Blair will almost certainly be forced to think twice about his current policy of preparing people for a referendum on British membership of the euro shortly after the next election.

He could meet that challenge by either deciding to beef up the campaign and really take on the "no" lobby, or keeping his head down in the hope it will be a short-lived upset.

Either way the hugely-controversial issue of membership of the euro is now set to provide Tony Blair with another headache in the run up to the next election.