The Tory leader claimed Mr Blair lacked the courage to argue his case for abolishing the pound after the Prime Minister persuaded the Britain in Europe campaign to tone down its support for the euro in order to win his backing.
Mr Hague said Mr Blair had sent his "disgraced spin doctor", Peter Mandelson, to Brussels on Monday to "state arrogantly that Labour will win the battle to abolish the pound in the end". "You won't win the battle if you haven't got the bottle," taunted Mr Hague. "And Tony Blair hasn't got the bottle for the battle."
Speaking in the City yesterday, Mr Hague trailed the findings of his party's review, chaired by the former Cabinet minister Sir John Nott, into whether Britain would gain or lose by keeping the pound. Mr Hague said the City had thrived because it had been open to overseas business, attracted highly skilled people and had not been subjected to a wider regulatory regime which was not in its interests.
"That might not be the case if we join the eurozone and link our economy to economies with higher taxes, less labour market flexibility and more government interference," said Mr Hague.
"The City is a success because it has set its own rules and managed its markets in its own way in order to respond to the needs of the market. The City must remain free to serve its clients - not the ambitions of bureaucrats and politicians."
Mr Hague urged City figures to speak out against the single currency. "For years now we have heard the case from the City for joining the euro. It is time to hear the case from the City for keeping the pound."
Today pro-Europeans will fight back when Mr Mandelson, in his second keynote speech on Europe in three days, addresses the AEEU engineering conference in Jersey. At the conference yesterday, Lord Marshall of Knightsbridge, chairman of the Britain in Europe group, and Sir Ken Jackson, the union's general secretary, warned that jobs would be lost if Britain remained outside "Euroland".
Lord Marshall told a fringe meeting that there was a danger that inward investors would choose Continental Europe above Britain if we did not become a "fully-fledged part of the single market".
The campaign leader said that recent conversations with business leaders in America, Australia and the Far East had convinced him of the dangers. "The first question they ask when contemplating investment in Britain is when we are likely to join the euro," he said.
Denying that the campaign had watered down its objectives to accommodate Mr Blair, Lord Marshall said: "Britain in Europe is obviously in favour of the principle of joining the single currency, but we do not advocate doing so at any price."
Sir Ken Jackson calculated that a million jobs could be lost if Britain remained outside the new currency. Employment would reduce and potential jobs would be lost, he said.Reuse content