Foolish to run from euro, says Blair

TONY BLAIR delivered his first verdict on the euro after the launch of the notes and coins - with a blunt warning that Britain can neither run nor hide.

'The euro is now a reality,' the Prime Minister said. 'So I think the idea that we can run away from it or hide our head in the sand and pretend it does not exist would be very foolish.'

Blair's unexpectedly tough words will hearten pro-Europeans clamouring for the Government to take a more positive line. But they are likely to heighten the belief among the euro-sceptics, including the Tories, that he is determined to go for the referendum he has pledged, probably next year.

The Prime Minister, questioned as he flew out to begin his six-day trip to the Indian sub-continent, reaffirmed that the decision on whether to join would be taken by the British people. He also stressed that there must be convergence between the economies of the UK and the 12 countries using the euro for the single currency to work and affirmed that the policy which includes the five economic tests set by Gordon Brown had not changed.

However, Blair said that 'the important thing' was that in 12 out of the 15 EU members, people were now using the euro in their daily lives. The message looks likely to revive the charges that the Government is relying on the march of the euro across the Continent, including the UK, to win the argument.

Former Northern Ireland Secretary Peter Mandelson today predicted Blair would seize the chance of a referendum on joining the euro before the next General Election. The Chancellor would not oppose the move, added Mandelson.