Britain's Tories have it right in one respect at least: Labour's handling of the single-currency issue now looks simply shambolic. The temerity of such a suggestion might be enough to win a roasting from New Labour's masters of spin. But the spin doctors and their masters have landed themselves in a right pickle, leaving neither cabinet, parliament, people nor the all-important City with the vaguest notion of the government's policy.

In the past 48 extraordinary hours, we have been led to think we have been told - but might not actually have been told anything. In what one BBC journalist labelled a "quasi announcement", unnamed and unelected Treasury advisers appeared to settle policy on arguably the most important issue to confront British ministers in peacetime.

Yet no word of that policy decision has passed the lips of the ministers responsible. Indeed, as a deafening silence rang out from Numbers 10 and 11 Downing Street yesterday, it was left to the Health Secretary, Frank Dobson, (whose days in cabinet are rumoured to be numbered) to maintain that nothing had changed, and that the policy remained as defined before the election, during it and since.

But the Chancellor, Mr Gordon Brown, had conspired to throw the political and economic worlds into utter confusion. He had used a newspaper interview to rehearse established policy, while permitting his aides (in off-the-record, and thus deniable briefings) to assure the Murdoch press that he has already moved far beyond it, and is preparing to rule-out British membership for this parliament's lifetime.

After a series of meetings with the Prime Minister, Tony Blair, last week, Mr Brown told The Times of London it remained "highly unlikely" Britain would join the currency in the 1999 first wave. Nothing new in that. But he added: "If we do not join in 1999, our task will be to deliver a period of sustainable growth, tackle the long-term weaknesses of the UK economy and continue to press for reform in Europe - in other words to make sure the British tests are being met."

While keeping his long-term options open, the Chancellor also stressed his determination not to repeat the Tory mistake over ERM membership. Their "when the time is right" formula opened the door to endless speculation which came to haunt John Major.

To the London Times the signals were "loud and clear". Satisfied it had understood "the spin", the paper congratulated Mr Blair and Mr Brown for settling the issue, and for their understanding "that it is perfectly logical to be at the same time pro-European and sceptical of EMU". An equally delighted editorial in the Sun rejoiced at "The news we all wanted", concluding: "A great weight has been lifted off the nation."

The Tories, too, seemed convinced by the spin - with Peter Lilley initially giving a grudging welcome to the government's "shambolic U-turn".

But not all Euro-sceptic Britain was rejoicing. Others noted that none of the headlines were sustained by what Mr Brown had actually said. After all, why describe joining-up in 1999 as highly unlikely if, in fact, the decision had been taken to rule it out completely before 2002 at the very earliest? Was the interview the harbinger of an imminent change of policy, or an effort to dampen speculation about the government's intentions - speculation which in recent weeks had pointed overwhelmingly in the opposite direction?

There had appeared very good reasons to believe the earlier speculation - that Foreign Secretary Robin Cook had shed his scepticism, and that the government was planning an "in principle" commitment to join EMU as soon as possible after 1999. Some Foreign Office sources were fuelling that expectation as recently as last Wednesday. Even on Friday - as Mr Brown prepared for his interview - sources suggested that some key people in the Treasury had not entirely abandoned hope of entering upon the first wave.

The Financial Times story three weeks ago - proclaiming a decisive government shift in favour of monetary union - was written by a respected journalist quoting ministerial sources. Even as it was denied, the government enjoyed a market reaction which saw the FTSE index leap more than 160 points, and the pound fall four pfennigs against the Deutschmark.

But last night the government was resisting calls for clarification from Mr Brown, amid warnings of a serious slide in share prices when the stock market opens this morning - coincidentally the 10th anniversary of the "Black Monday" crash.

A former member of the Treasury's panel of "wise men" said the confusion was appalling and "debilitating for the real economy".

And Mr Lilley forecast that earlier investments, inspired by the Financial Times story, would be reversed "at great cost to many savers, pension funds and pensioners".

However, just as Downing Street declined to put ministers on the airwaves yesterday to explain the position, so Mr Brown is likely to resist Mr Lilley's call for the recall of the Commons this week to tell MPs what it is.

MPs, like the rest of us, are presumably to be kept guessing. Guessing, for example, about a seemingly authoritative report in yesterday's Observer explaining that the decision to rule out early membership was taken after Mr Brown told Mr Blair that cutting British interest rates to European levels would see taxes soar by a staggering £20 billion.

We know Downing Street's fondness for squaring some of the Sunday papers. And that report certainly appeared to underline the Times account, as did a Downing Street statement that the logical extension of Mr Brown's comments "is that it is far less likely that Britain will join in this parliament". But then Downing Street also said it would not demur from Mr Dobson, who suggested Mr Brown's comments had been misinterpreted, adding helpfully: "Nothing can be ruled out, can it, in this world."

So confusion reigns. But the certainty is that it cannot much longer. The demands of Europe, of MPs who think this government contemptuous of their rights, and of the markets, will require Mr Brown swiftly to confirm or deny his spin doctors.

And one or two other things can probably be predicted with reasonable certainty. Having raised their expectations, Mr Blair should calculate to pay an even higher price should he eventually decide to disappoint the Euro-sceptic wing of his election-winning coalition. Whatever the greater priority he gives to winning that second term, his government will not be freed of the pressure of speculation once the single currency is up and running.

For all the warm words that might pass between himself and Chancellor Kohl at Chequers this afternoon, the Prime Minister's pretensions to play a leading role in Europe will start to look mighty overblown.