Blair shifts his ground on euro support

The British Prime Minister has denounced those who want immediate British entry to a single currency and those who want to rule it out forever as equally "daft".

"There are two daft positions. We are not in either daft position," Mr Tony Blair told the House of Commons yesterday, after weekend interviews in which he appeared to distance himself from the euro.

Labour backbencher Mr Dennis Skinner, a long-time anti-European and a foe of the single currency, congratulated Mr Blair for his new line. But Mr Blair's official spokesman angrily denounced as "garbage" news reports that he was shifting policy because of a poor result for Labour in the June 10th European elections.

The Prime Minister insisted he had not changed his position.

"What I said was `daft' was actually two propositions. Daft proposition number one is to join the euro regardless of the economic conditions," he said.

Equally daft was the Conservative position of ruling out entry for 10 years or forever, he said.

"What we should do is join provided the economic conditions are met," he said.

Opposition spokesmen detected a weakening in Mr Blair's commitment to Britain entering the euro, which Labour says will only take place after a referendum some time in the next parliament. Recent surveys show deep public opposition to the euro.

Conservative finance spokesman, Mr Francis Maude, said Mr Blair was backing out from the euro by stealth and fellow Tory MP Michael Spicer said public opinion was scaring him off.

"Mr Blair seems to operate on the basis of opinion polls and they are very clear, so it is not surprising he is now saying it is daft to join," Mr Spicer said. Liberal Democrat Treasury spokesman Mr Malcolm Bruce said Mr Blair was failing to put over the positive case for joining the euro. "Unless Mr Blair grasps the nettle and leads the campaign we will never win a referendum," he said.

Mr Blair's weekend interviews make clear he now believes Britain can be influential in Europe without necessarily joining the euro.

Raising British influence in Europe "doesn't necessarily mean we go into the single currency", he said. Rather it meant adopting a positive and constructive attitude in the EU.

"I've always thought Blair's main reason for adopting the single currency was influence in the EU. That does imply some rethinking," said Charles Grant, head of the pro-European thinktank, the Centre for European Reform.

Former British Foreign Secretary Lord Owen yesterday predicted Mr Blair would eventually abandon calling a referendum in the next parliament because he knew he could not win it.

"Tony Blair wants two terms of office, maybe three, and he is not going to do anything that will put that in jeopardy," Lord Owen said in an interview with the London Times.