British citizens would each lose £2,000 every year that the UK stayed out of the euro, a leading economist has warned cabinet ministers.
In a pamphlet for the pro-single currency group Britain in Europe, Professor Robin Marris, an emeritus professor of economics at the University of London, says there is no better time than now to sign up to the euro and there is "no valid economic reason for delay".
His paper has been distributed to every member of Tony Blair's Cabinet, as they grapple with the document drawn up by the Treasury giving its assessment of Chancellor Gordon Brown's five economic tests. A public announcement will be made by the Chancellor on 9 June.
Professor Marris argues in his economic analysis that staying out of the euro would cost Britain 0.5 per cent on economic growth. He says that economic welfare in the UK is more likely to benefit than to suffer from membership and that the ideal rate for entry is the current exchange rate of €1.40 to £1.
He writes: "If the British Government or people decide to stay out of the euro on political grounds, the cost will be borne by future generations ... The only conceivable reasons for delay are political and there is no valid economic reason for delay."
The professor's findings are broadly backed by a panel of 11 leading economists from around the world who prepared an accompanying document for Britain in Europe.
But the Government is understood to be increasingly uneasy about the prospects of a euro referendum following a spate of opinion polls making it clear that the British public is doggedly against membership, by two to one.
And, more worrying still, the Tories' latest poll rating was within a point of Labour, following the row over calls - rebuffed by the Government - for a referendum on the proposed changes to the European Union's constitution.
Robert Worcester, the chairman of the polling organisation Mori, said that 77 per cent of people wanted a referendum on the EU constitution. He warned that the failure to hold one meant an early referendum on single currency membership was "even less likely". "I don't think it's likely at all. I wouldn't be surprised if we hadn't had a referendum on that before 2009."
However, Stephan Shakespeare, from the pollsters YouGov, whose survey found the Tories closing the gap with Labour, argued that polling showed that if cabinet ministers - particularly Mr Blair and Mr Brown - were prepared to wholeheartedly campaign in favour of the single currency "it would still be hard to win but would start as an even race".
Britain in Europe continues to insist that there is still "everything to play for" and that cabinet support is crucial.
The former prime minister Sir Edward Heath, who took Britain into Europe, said many opponents of the euro were following a concealed agenda to bring about Britain's withdrawal from the EU.
The euro decision was Britain's chance to end its "ambivalence" on Europe. Sir Edward urged membership on both political and economic grounds.Reuse content