The British government has undermined its aspirations to leadership in Europe as a direct result of "media spinning" over the single currency, the vice-president of the European Commission and former Tory minister, Sir Leon Brittan, will tell a conference on Economic and Monetary Union (EMU) later today.
In his attack on the government's difficulties in providing seamless comment on its policy towards the single currency, Sir Leon will concentrate on what he calls "plenty of media spinning but little serious discussion of the real issues at stake".
The EMU conference will be told that, in the view from Brussels, and whatever the recent turn of events in London, the government cannot escape the fact that in less than 15 months a large number of its European partners will almost certainly be ready to adopt the euro.
The confusion over the government's position arose at the weekend following an interview in the Times with the Chancellor of the Exchequer, Mr Gordon Brown, in which he repeated the government's line that British entry into the single currency in 1999 is highly unlikely.
The subsequent "spin" on the interview, by government advisers, that Mr Brown was in effect ruling out entry until after the next general election, was not denied by Downing Street and led a jittery financial market into confusion and caused a fall in share prices on the Stock Exchange.
The need for clarity on the government's position on entry to the single currency, and Mr Brown's impending statement to the Commons on the issue, almost certainly topped the agenda at the first meeting of senior government ministers yesterday since the row broke at the weekend.
However, while Number 10 remained tight-lipped about the precise details of the discussion between the Prime Minister, Mr Tony Blair, and his ministers, the Minister for Competitiveness in Europe, Lord Simon, was forced to deny that he was the source of a Financial Times article last month. The article had predicted British entry to the single currency soon after 1999.
The article took the financial market by surprise with the result that shares prices soared and the pound fell.
The former Tory party chairman and trade secretary, Lord Tebbit, tabled a series of questions in the House of Lords yesterday, seeking clarification of Lord Simon's role in preparing the article.
One question asked Lord Simon to outline the conversations "with journalists he has had in the last six months concerning the single currency".
Another question went one step further and asked "whether it is part of his duty to brief representatives of the Financial Times newspaper on government thinking."
In his reply, Lord Simon denied he was the source, and in a statement insisted he had been out of the country when the article was written.
"I was not the source of the September 26th Financial Times article on EMU. In fact I was on holiday in Portugal at the time and had no contact with the British media while I was away."
Earlier, the EMU conference was told by Sir Nigel Wicks, a permanent secretary at the Treasury, that the convergence criteria for the single currency, enshrined in the Maastricht Treaty, were "most unclear."
Careful to avoid the row over British entry into the single currency, Sir Nigel explained there had been major changes to the Exchange Rate Mechanism (ERM) since Britain left it in 1992.
The government, he said, would need to look carefully at exchange rates, inflation and interest rates before it could join the EMU.