Labour backbencher launches anti-euro drive

The labour left wing opened its campaign to dissuade the Government from signing up to the euro yesterday.

Ian Davidson, secretary of the Labour backbench trade union group, called for his wing of the party to take the lead in the fight to save the pound. And he warned Tony Blair that the Tories' overwhelming election defeat did not mean that Euroscepticism had disappeared.

His attack, to be published in tomorrow's edition of Tribune, came as the fiercely pro-euro Tory MP, Ian Taylor, demanded a stronger lead from the Prime Minister in advocating membership of the single currency.

The conflicting demands are a foretaste of the political tug-of-war that Mr Blair will face in the next two years.

Mr Davidson, the MP for Glasgow Pollok, said that membership of the euro would mean "losing control of the economy and putting jobs at risk.

"Pro-euro big business tries to scare people into the euro by saying that jobs and investment will be lost," he said. "There has been no evidence of this. On the contrary, many on the left believe that it is the disinflationary, dogmatic structure of European monetary union that will destroy jobs."

He said that hostility to joining the single currency was growing among the public and predicted that the campaign of opposition would broaden.

"Many Labour supporters have been put off expressing their concerns about the euro because it would mean agreeing with William Hague and his crew," he said.

"Membership of the euro is not inevitable and the next few months should be spent taking a close look at what it would mean and the potential damage it could do to the British economy and political system."

On the other side of the argument, Mr Taylor, who becomes chairman of the pro- single currency European Movement this week, will argue that the election result gives Mr Blair the "authority to lead a great national debate about Britain's future in Europe".

He will say today that before the Inter-Governmental Conference in 2004 "it is surely in the national interest that we make a decision about whether or not we should join the euro. Rejecting euro membership would demote Britain to an outer tier of lesser influence in the crucial negotiations on the future shape of Europe.

Mr Taylor will argue that Britain would be "weakened enormously" at the conference if it had already decided against joining or had decided to defer the final judgement.