The British Prime Minister, Mr Tony Blair, yesterday underlined his political commitment to take Britain into the European Union's single currency provided the economic conditions were right.
His comments at a news conference were welcomed by euro supporters who said they showed Mr Blair remained serious about taking Britain into the euro zone in the right circumstances.
"The reasons why we are in principle in favour of joining the euro are because if the euro is successful and [it is\] in our economic interests to join then it is going to be good for British jobs, British industry and British investment," Mr Blair said.
"I want the euro to be successful," he said. "For the euro to fail would be a disaster for Britain," he added.
Mr Blair said Britain would lose influence in the EU if it stayed out of the euro for political reasons.
His comments had little impact on currency markets.
The pound was trading at 64.30p to the euro, about two-thirds of a penny above the 2½-year low it reached earlier this month. Britain is one of three countries in the EU, along with Sweden and Denmark, not participating in the euro.
Despite a more positive attitude to the euro at the start of this year following the introduction of euro notes and coins, the latest opinion polls show the majority of Britons still oppose ditching the pound in favour of the euro.
Mr Blair has promised to carry out five tests by June 2003 which are designed to determine whether Britain would gain or lose economically from joining the 12-nation euro area.
If the five tests - which cover economic convergence with the euro area and the impact joining the euro would have on jobs, investment and London's financial district - are met, he has promised to hold a referendum.
British government critics and euro opponents argue that the economic tests are a distraction and that the decision to enter the euro or not will be based on politics and opinion polls.
Mr Blair firmly rejected that suggestion.
"I have never thought of the tests as political camouflage. The tests are carried out by the Treasury and it is important they are carried out with rigour," he said.
Pro-euro lobby groups in Britain and in Europe welcomed Mr Blair's remarks.
"The Prime Minister's positive comments today . . . show that he remains serious about taking Britain into the euro in the right economic circumstances," the chairman of Britain in Europe, Lord Marshall, said.
"He is correct, because long-term isolation from the common currency will damage British jobs, prosperity and inward investment," he added.
Euro-sceptics disagreed. "Britain has done well in recent years because we have kept control of our economy and we should not put this at risk by locking into the euro," said Mr George Eustice, head of the "No" campaign.