Blair under pressure to back euro

TONY BLAIR may attend the launch of the embryo "yes" campaign for the single currency next month to help pro-Europeans fight back against the Eurosceptics.

Mr Blair, who had signalled he is unlikely to attend the launch of the Britain In Europe movement, is rethinking his decision amid concern in Downing Street that opponents of the euro are making all the running following the Tories' success in the European elections.

The euro hit fresh problems yesterday, falling against the pound and dollar after Romano Prodi, the incoming European Commission President, appeared to question Italy's long-term place in the new currency.

Francis Maude, the shadow Chancellor, said Mr Prodi's comments were an "illustration of the strains and tensions built into the single currency" and the difficulty of running a "one-size-fits-all policy".

Mr Blair is under strong pressure from leading pro-Europeans to attend next month's fightback launch.

He has been urged to throw his weight behind the campaign by Lord Marshall, the British Airways chairman; Lord Hollick, the millionaire media boss and Peter Mandelson, the former cabinet minister and Mr Blair's closest ally, who resigned last December.

Organisers of Britain In Europe insisted last night their launch would go ahead with or without Mr Blair, but said they would be "delighted" if he attended. They admitted the various pro-EU groups had so far failed to make much impact.

Yesterday Downing Street insisted that the Government's policy on the euro had not changed "one iota" after Eurosceptics seized on remarks by Mr Blair that it would be "daft" for Britain to join the single currency now.

In the Commons, the Prime Minister flatly rejected claims that the Government had thrown up fresh obstacles to joining the euro by demanding economic reforms in the EU before Britain signed up.

William Hague accused Mr Blair of "sowing confusion" about the Government's policy. He said Mr Blair had appeared to add a sixth test to its list of conditions for membership, at the same time as he was warning that it would be "daft" to rush for early entry.

"If you really believe that ... would you also not agree that it is daft to go on asking taxpayers and business to go on spending millions of pounds on the national handover plan?" Mr Hague demanded.

Mr Blair hit back, claiming the Tories had become a "single issue party". "What I said was daft was two propositions. Daft proposition number one is to join the euro regardless of the economic conditions. Daft proposition number two is the one you espouse, which is to rule it out forever," he said.

Malcolm Bruce, the Liberal Democrats' Treasury spokesman, warned that Europhiles would not win a single currency referendum unless Mr Blair "grasps the nettle". He said: "The sceptics have filled the vacuum and Mr Blair is in danger of losing the argument."