The Prime Minister reinforced his shift towards entry with a dismissive response to yesterday's Sun newspaper, attacking him as the "most dangerous man in Britain".
Mr Blair shrugged off the Euro-scepticism and re-emphasised his commitment to keep open Britain's option to enter the single currency, regardless of the pressure from Mr Murdoch's media empire.
Downing Street denied it was worried about losing the support of a Murdoch newspaper and suggested it was part of a circulation war.
The Prime Minister's official spokesman said: "What the newspapers do is entirely a matter for them. The national newspapers have to sell papers and take a position. One of the reasons is to get as much publicity for itself as possible. It is part of the game. I have no complaint about that."
The Prime Minister told MPs during question time that he would govern for Britain, not the readers of one newspaper. Mr Blair told the Commons: "There are two absurd policies on the euro. One is to say, as the Conservative Party do, that they are against it and will never join it, no matter what the economic circumstances are. The second is the position of the Liberal Democrats, which is to say you must join it irrespective of the economic circumstances.
"The position I believe to be sensible is to say that we will not rule out joining it in principle. We hope for it to succeed but whether we join or not depends on whether it satisfies the test of our national economic interest."
Whitehall sources dismissed the debate as part of the press obsession with itself, and ridiculed the BBC for telephoning the Chancellor's aides after midnight to ask Gordon Brown to respond on the BBC Today programme yesterday morning, an offer he declined.
But that does not rule out the possibility that efforts will be made to secure the Sun's overall support for Labour for the next election.
Mr Blair told MPs: "The position set out by the Chancellor last October is the position, and we will not change that position. Newspapers are entitled to their view but we govern in the national interest."
It came as the Shadow Chancellor, Francis Maude, underlined the Euro- scepticism of the Tory leadership under William Hague, in a speech which alarmed the pro-European MPs on his own side.
One former Tory minister said: "We have become more Euro-sceptic since Hague took over. I don't know what he thinks he's doing, but we'll look pretty foolish when it's a success."
The pro-European MPs, led by Kenneth Clarke, deny they are plotting to overthrow Mr Hague, but they fully expect a challenge if the Tories come third behind the Liberal Democrats in next year's European elections. They also believe Michael Portillo is waiting in the wings for Mr Hague to fail, but he will not strike until after the next general election.
Mr Maude's speech emphasised the differences between the two parties in highlighting the pragmatic reasons for rejecting the euro. Mr Portillo is opposed to it on principle. "EMU is not some bolt-on accessory, like a satellite dish," Mr Maude said. "Joining the single currency would mean massive and irreversible changes to the way our economy is run.
"British interest rates would have to be set to suit the economic needs of Europe as a whole rather than of Britain."
He said: "Without an early and dramatic change to our economic cycle, which no one is currently predicting, that would mean interest rates that were likely to be wrong for Britain nine times out of ten."
And EMU would mean a "degree of harmonised taxation" leading, he said, to "tax rises".Reuse content