Hain urges Britain to accept euro

BRITAIN is certain to suffer if it does not join the single currency, Europe Minister Peter Hain has said. Hain's declaration that 'of course' the country will lose out if it does not sign up to the euro puts him seriously at odds with Gordon Brown. The Chancellor has repeatedly said the decision depends on whether it is in the UK's economic interests to join, subject to the five economic tests he has set.

Hain also urged shops to welcome the euro notes and coins, to be launched in 12 European Union countries on 1 January, and to price their goods in both euros and sterling. He dismissed many of the opponents of the project as 'nutters', and a 'rabble' led by Tory leader Iain Duncan Smith. However, Hain denied that Prime Minister Tony Blair had already decided to call the referendum he has promised if the Government decides Britain ought to go in.

Meanwhile, big business is bracing to put its financial weight behind the Government's push to join the euro. Fears are growing that corporate funding could tilt a referendum in favour of the single currency, despite public scepticism.

Some of the nation's largest companies, including National Grid, Scottish Power and Sainsbury's, have been asking shareholders for blanket approval for big political donations. They follow similar moves by British American Tobacco, BP and the newspaper group Trinity Mirror.

Companies say their actions have been prompted by a change in the law forcing them to declare even small political contributions. But the moves have caused concern that pro-euro bosses will orchestrate a large-scale funding operation for Tony Blair if he calls a referendum on the euro.

In the run-up to the vote on membership of the Common Market 26 years ago, public opinion was strongly in favour of leaving the union. But the huge funds supplied by big business to the pro-EEC campaign helped turn the tide.

Companies are pushing through motions at their annual general meetings that will give them a freer hand to back the single currency. National Grid is asking shareholders for permission to make donations of up to £100,000 to European Union political organisations. Vodafone, Sainsbury's and Scottish Power have already won power from shareholders that would allow them to campaign on EU issues.

With just four days until the new currency is launched in Europe, campaigners in Britain are gearing up for a gruelling campaign. Ruth Lea, policy head of the Institute of Directors and a prominent eurosceptic, said: 'I think it will inevitably be the case that large companies will campaign both directly and indirectly for euro membership.' She added: 'It is in their interests, even if it is not necessarily in the interests of the rest of the country.'