Hain: euro vote may be held by next year

Peter Hain, the Europe minister, raised the prospect yesterday of Britain holding a referendum over joining the single European currency as early as spring next year.

In comments certain to re-ignite the debate over the euro, he suggested Gordon Brown, the Chancellor, could approve a referendum on British membership as early as this autumn.

Mr Hain became the first senior minister to spell out a potential timetable for ditching the pound by 2005. But his comments will enrage the Treasury, which has refused to commit itself to any dates. He saidthe Chancellor could announce this autumn that Britain had met the Government's five economic tests for membership and that he was recommending a referendum.

A Bill for the vote could go through the Commons in four months, with the referendum being held two months after that. If Britain voted to join the euro, the currency would be introduced in 2005.

Mr Hain told a French newspaper he believed Mr Brown would decide whether Britain had met the five tests well before the Government's self-imposed time limit of June 2003.

He said: "I don't know when he will present his conclusions, this autumn, next winter or in spring 2003. But if the analysis is positive and if the Government follows his advice, then we will need four months, roughly, for Parliament to approve regulations for a referendum ... There will be six months between the Government's decision and the referendum."

The minister admitted the referendum campaign would be a "tough battle" but underlined his enthusiasm, claiming that not joining the euro, "would be an enormous blunder".

"In five or six years, the 10 new countries integrated into the European Union will have adopted the euro. It is a condition of their adhesion. Sweden and Denmark will also have adopted the new money. If we were to be the only ones outside the euro, we would be isolated: one country against 24!

He added: "I'm not saying the euro is inevitable. But the alternative is isolation from which no good would come."

Mr Hain has been authorised by Tony Blair to lead a campaign reinforcing the benefits of the euro. But his stand will dismay the Treasury, which is still cautious over membership and hostile to interventions from other departments.

Anti-euro campaigners said his comments were proof of a secret agenda. George Eustice, of Business for Sterling, said: "The Government is prepared to put politics before Britain's economic interests."