Mr Tony Blair's government will hope to salvage its pro-European reputation today when Chancellor Gordon Brown finally defines the position on British membership of the Single Currency.
The Prime Minister and Chancellor will hold final consultations at Downing Street this morning before Mr Brown delivers a statement to Parliament, widely expected to rule out British participation in EMU for the lifetime of the present parliament.
Mr Brown's hurried statement to MPs - on their first day back after a 12 week recess - has been forced by the market turbulence and negative political fallout resulting from weeks of conflicting signals about the Labour government's intentions.
Weekend reports suggested that the Foreign Secretary, Mr Robin Cook, the deputy prime minister, Mr John Prescott, and the Minister without Portfolio, Mr Peter Mandelson, were neither consulted nor forewarned that the Chancellor's interview in the London Times 10 days ago would result in headlines ruling out entry into the single currency until after the next general election.
And as speculation continued about the state of relations between Mr Blair and Mr Brown, there was evidence of a rearguard action being fought by pro-Europeans inside and outside the cabinet, outraged that the major economic decision facing the government might be taken in fear of the Euro-sceptical tabloid and centre-right press.
The prime minister on Friday ordered an official silence by ministers, officials and "spin doctors" in advance of Mr Brown's statement. Despite this, there were reports yesterday that the statement would amount to a further repositioning - with the Chancellor ruling out membership before 2002, while setting the economy on course for membership at an early date thereafter. One specific suggestion was that Mr Brown would signal his openness to the principle of monetary union, and propose the euro operate as a parallel currency in Britain prior to the abolition of sterling.
And in contrast to the rave reviews of a week ago, two Sunday newspapers from the Murdoch stable yesterday forecast Mr Brown would tell British business to prepare for membership, while assuring the European Union of the government's determination to work to ensure the success of the single currency project.
A former chancellor, Mr Norman Lamont, predicted that Mr Brown would perform what he called "a peoples' u-turn" - stifling the government's instincts, and making sceptical noises while preparing to join at a later date. He said: "Blair would like to go in but he recognises that public opinion is against. He's worried about the next election so he's going to try to convert public opinion by spending taxpayers money trying to persuade the British people that this idiotic idea makes sense."
Mr Lamont's comments reflect the analysis of the Conservative leader, Mr William Hague. Last week Mr Hague disagreed with his shadow chancellor's initial welcome for the Labour "u-turn", concluding that Labour's public signals were an electoral tactic reflecting the paradox that - in order to achieve British membership of EMU in 2002 or 2003 - they would have to "sound" sufficiently Euro-sceptic to secure a second term.
