Blair under fire from both sides as he hedges on euro


Britain's European war reignited last night as 12 euro zone countries prepared for tomorrow's introduction of the new single currency.

The Prime Minister, Mr Tony Blair, gave a fresh signal of his enthusiasm for eventual British membership, describing the success of the euro as "massively in Britain's interests" and repeating his government's commitment to join subject to the Treasury's five economic tests and a popular vote in a subsequent referendum.

However, Mr Blair's continued refusal to name the day for a British referendum brought complaints from pro-euro enthusiasts even as the Conservative leader, Mr Iain Duncan Smith, predicted that a popular coalition against entry would see the British people "put their tanks on his [MR BLAIR'S] lawn".

Amid signs that the Labour government is preparing to spend millions of pounds in a pro-euro propaganda offensive, Mr Duncan Smith accused Mr Blair of "furtive manoeuvring to bamboozle the British people" into giving up sterling and of waging "a phoney war" without yet daring to nail his colours to the mast.

However, the former Conservative deputy prime minister and leading europhile, Lord Heseltine, accused Mr Blair of running scared of Britain's North American-owned, euro-sceptic press. "He isn't confident he can win this battle," Lord Heseltine told the BBC.

"The fact is they've run away from the issue," he continued, complaining that government indecision left leading companies and much of British commerce frustrated and uncertain.

Meanwhile, the leader of the Liberal Democrats, Mr Charles Kennedy, dismissed the Chancellor's economic tests as "a fig leaf".

He claimed the Blair government would need to legislate for a referendum in the coming calendar year if the euro was not to become the dominant issue of the next general election, most likely in 2005.

Speaking on the BBC's World This Weekend programme, Mr Kennedy said continued delay would see Mr Blair suffer the same fate as previous British prime ministers, with his position undermined at home and hampered when attempting to provide leadership abroad.

"The longer this goes on, the more the fig leaf of the economic tests is beginning to be exposed as rather hollow," said Mr Kennedy.

"Mr Blair will find domestically that his position becomes increasingly undermined if a clear lead is not given."

Lord Heseltine was also dismissive of the economic tests on which Mr Brown must deliver his assessment within 17 months, describing them as "a protective barrier" giving the government "apparently intellectually defensible reasons for putting things off".