Blair aide attacks Byers for 'silly talk' as euro Bill delayed

Chancellor's extended assessment of the five key economic tests leaves beleaguered minister under more pressure

Tony Blair and Gordon Brown are expected to shelve their decision on whether Britain should join the single currency until early next year.

Mr Blair fuelled speculation that the Government's five economic tests for joining would be measured this autumn when he warned in a television interview this week that it would be "crazy" to remain outside the euro for political reasons.

Then Stephen Byers, the Secretary of State for Transport, Local Government and the Regions, told journalists that space for a Referendum Bill would be allocated in the next parliamentary session starting in November – a suggestion slapped down by Downing Street.

It now appears that the Chancellor is unlikely to complete his assessment of the five economic tests for joining the euro until the new year. One Blair aide said: "I don't think anything will happen before early next year. That's why it was silly to talk about legislation in November. You don't know whether you would need a Bill until after you have done the assessment."

Delaying the economic assessment until January or February would not rule out a referendum in May or June next year. The Government has promised to complete its economic assessment by next June. Its changeover plan for the euro, without setting dates, envisages a four-month gap between a cabinet decision and a referendum, during which legislation would be passed by Parliament.

The former cabinet minister Peter Mandelson, a supporter of euro entry, predicted yesterday that the Government would follow a similar timetable to the 1975 referendum on Britain's continued membership of the European Union.

He told BBC Radio: "The Cabinet made a decision to have a referendum, I think it was in March 1975. A Bill was introduced to Parliament and enacted in April 1975 and a referendum took place in June 1975.

"If there is a referendum next year – and I think the economic jury is still out on whether that is possible – that is what I believe the timetable will be."

Mr Mandelson joined the criticism of Mr Byers. Although saying he had a "bum rap" from the media, he suggested that Mr Byers should not have speculated about the timing of legislation at a lunch with Westminster journalists.

"He would be better for sticking to transport, local government and the regions and leave the euro to others," said Mr Mandelson.

"He really cannot win on this and he [should] ... concentrate on what his job is, get some achievements under his belt, resurface and have people look at him in a different way."

Mr Blair's spokesman said Mr Byers would not be sacked for his remarks. But the Tories urged the Government to clarify its policy on the euro.

Michael Howard, the Shadow Chancellor, said: "Stephen Byers has confirmed what we have always known – the five tests are a sham. The only test the Government is interested in is will they win a referendum? That's the be-all and end-all as far as they are concerned."