Labour accused of shelving euro inquiry

Labour MPs were accused last night of shelving an inquiry into the five economic tests to determine whether Britain should hold a referendum on the euro.

Angry opposition MPs walked out of a stormy meeting of the Commons Treasury Select Committee after hearing that an inquiry might be delayed until the autumn.

The row follows months of argument over the inquiry, which will examine the preliminary work being carried out by the Treasury to determine whether the five tests have been met. The assessment is crucial to Gordon Brown's decision whether to hold a referendum on the euro.

David Laws, a Liberal Democrat member of the committee, said that the Chancellor had already agreed to give evidence before the committee, but the inquiry had been postponed.

He said: "It is already public knowledge that the Chancellor has agreed to give evidence in principle on the work the Treasury is doing to prepare for the judgement on the euro tests. It now seems that the Treasury committee is not going to follow through on this inquiry before the autumn.

"You wonder what the Treasury committee is for if it is not looking at issues like this, which must be one of the most important policy decisions for half a century."

Meanwhile the Conservatives faced fresh division over Europe as Kenneth Clarke, the former chancellor and Tory leadership candidate, launched a new group to argue the case for the EU within the party. Mr Clarke, in his first intervention since he lost the Tory leadership election to Iain Duncan Smith, said the new Tory European Network would bring together figures on the left of the party.