This provoked pro-euro Tory MPs to accuse the Chancellor of watering down the Treasury change-over plan for the euro by avoiding giving a clear lead on Britain's entry to the single European currency.
Conservatives have told Cabinet ministers privately that if the Government comes out in favour of entry to the euro, it could cause a split in the Tory party.
However, they say they cannot move until Tony Blair takes a clear lead on the euro and they are remaining silent to avoid embarrassing William Hague, the Conservative Party leader, during the campaign for the European elections.
"We hear the change-over plan has been redrafted to water it down," said a senior pro-euro Tory. "It's not going to be explicitly signalling Britain's entry and it won't have a referendum date.
"If Blair climbed off the fence, it would put us in a very difficult position. We would have no option but to come out in support of the Government."
Michael Heseltine, the former Tory cabinet minister, is ready to make a powerful re-entry into the euro debate after the European elections. He criticised the Tory party referendum which endorsed Mr Hague's policy of ruling out entry for the next Parliament.
John Redwood, a leading opponent of the euro inside the Shadow Cabinet, told the Oxford Union last night that it was "typical of New Labour that they still have not finally made up their mind on entry to the euro".
He added: "I am sure the change-over plan will say to business it is necessary to prepare for the euro but it makes the whole thing a waste of time and money. Why should they spend any money preparing for the euro if the Government are not prepared to argue its case?"
Ken Jackson, the AEEU leader, and Nick Reilly, chief executive of Vauxhall Motors, will today add to the calls for Mr Blair to take a lead in favour of joining the euro, in advance of the change-over plan.
Britain's senior European Commissioner, Sir Leon Brittan, last night also urged Mr Blair to begin campaigning outright for UK membership.
A referendum on membership should be held before the next election, said Sir Leon.Reuse content