In a renewed signal of his enthusiasm for British membership, Mr Tony Blair has warned Britons they cannot "run away" from the euro or pretend it does not exist.
While stressing that economic convergence remained key to an eventual British decision, and that that decision is ultimately for the British people, the Prime Minister fuelled Tory suspicions that his mind was already made up
"We have got to prepare for it, Mr Blair said. "I think the important thing to recognise is that for 12 out of 15 of the European Union countries it is now there. It's the currency people are using in their daily lives."
Mr Blair's comments closely followed a prediction by Mr Peter Mandelson, the former Northern Ireland secretary, that Mr Blair would "seize the chance" and hold a referendum during the lifetime of the present parliament.
Mr Mandelson - who remains close to Mr Blair - dismissed suggestions that the Chancellor, Mr Gordon Brown, would seek to stop Mr Blair, or that the government would delay a decision until polls showed public opinion moving in favour of British membership of the single currency.
In the Financial Times Mr Mandelson wrote: "Indeed I do not believe a referendum will ever start with the pro-euros ahead of the anti campaigners."
Following an earlier suggestion by Mr Peter Hain, the Europe Minister, that British membership was almost inevitable, Mr Mandelson's comments will be taken as the clearest indication that Mr Blair intends to decide the issue "in the national interest" and then seek to overturn sceptical opinion during the course of a referendum campaign.
Of Mr Brown's alleged "but not self-proclaimed" opposition to joining, Mr Mandelson said: "If anyone hopes that the Prime Minister and the Chancellor of the Exchequer will jeopardise the unity, and therefore the durability, of the government in this way, dream on."
He continued: "I believe that the Chancellor worked out a long time ago that Britain's interests lay in Europe and in its single currency, so long as the timing of entry were right."
Mr Mandelson said he had no doubt that the Chancellor would wish to maintain his say over membership. "His five economic tests are the apparent means of doing so, and who would blame him, given the impact of entry on the domestic economy? But to characterise this as a fight to the finish or as an attempt to cast a veto over membership is misguided."
However, the former prime minister, Mr John Major, suggested yesterday that Mr Blair was unlikely to risk a referendum. "In my judgment it's still too early to go in. Were there to be an early referendum I, for one, would vote against entry."