The British government admitted yesterday it faced strong pressure from inward investors to hold its planned referendum about adoption of the euro soon after the next general election, likely next year.

Trade and Industry Secretary Mr Stephen Byers said: "For the first time, big inward investors are telling me that we need to make a decision on the euro early in the next parliament."

His statement follows a meeting between the Prime Minister, Mr Tony Blair, and senior Japanese business executives in November, during which they complained the strength of sterling was making their companies operating in Britain uncompetitive. They were disappointed by the Prime Minister's unenthusiastic response to their calls for early euro membership. But, after a series of setbacks for the government's pro-European policy during 1999, Foreign Secretary Mr Robin Cook yesterday said a priority for the next six months would be to "build public support among the British people for Britain in Europe".

Ministers acknowledge they cannot hold the euro referendum until public scepticism about the EU is reversed.

Mr Byers said the government could properly debate the euro if the European summit on economic reform in March showed the EU was "an institution that encourages enterprise and innovation".

Members of the Keidanren, the main Japanese business organisation, warned Mr Blair during their November meeting of growing concern about the government's unwillingness to campaign for the euro. Mr Norio Ohga, chairman of Sony, is thought to have made the point forcefully, arguing Britain was losing its competitive edge.