In terms of the euro, the UK may be "out" but the City of London has been effectively "in" from the start, according to its lord mayor, Mr Clive Martin.

By any standards, London's international financial centre has been hugely successful as a market for trading euros, he said.

In Dublin yesterday to "learn from the success of the EU economic miracle" - the development of the Irish economy - and to hear the views of the financial services industry on the EU and the euro, Mr Martin stressed the role of the City of London in the European capital market.

"There was a perception that because Britain was not in the euro zone, London would slip back as a trading centre. But because there is such a huge cluster of international businesses there, it just absorbed the euro under every heading," he said.

Since the launch of the euro, the City had maintained its market share and even increased it in a number of areas, he said. Its share of the foreign exchange market had increased while the amount of business conducted in other European centres had fallen sharply, he said. Euro denominated business now accounts for about 44 per cent of total bond market trade in London and is larger than dollar business, although dollar business has not decreased.

More than 90 per cent of euro denominated cross-border equity turnover now went though member firms on the London Stock Exchange (LSE) while well in excess of 90 per cent of all euro denominated short-term interest rate derivatives business was transacted through the London International Financial Futures Exchange (LIFFE), he said.

An elected representative, Mr Martin is the worldwide ambassador for the centre of British-based financial services industry. This year his itinerary includes visits to all 13 countries seeking EU membership.

The greatest challenge to the City as an international financial centre and its greatest opportunity came with electronic commerce, Mr Martin said.

"Electronic commerce affects the development of all centres. It is up to us to seize the advantage it offers as a tool to remain competitive.

"It enables centres to reduce costs. If a centre does not make use of electronic commerce, another centre will take business away from it. Three years ago we found out just how mobile business has become when LIFFE lost business to Frankfurt. Therefore the opportunities offered through electronic commerce must be grasped quickly."

He rejected any suggestion that the electronic glitch on April 5th at the LSE, when the exchange could not trade for a number of hours on the important last day of the tax year had damaged business.

"The LSE is but a fraction of the whole market and the LIFFE and other markets were humming away, so media reports overlooked the fact that two-thirds of all trading was unaffected. It attracted attention because it was unusual and it happened on April 5th."

He declined to be drawn on talk of a possible merger between the London exchange and the Frankfurt Borse. "This is all conjecture. When the LSE has something to say it will make an appropriate announcement."