The Financial Timessays Prime Minister Tony Blair has agreed to rule out an early referendum on entry to the euro.
It said this came after he was given a downbeat assessment by Chancellor of the Exchequer Gordon Brown, who indicated the Treasury's five economic tests on joining the currency pointed to a decisive No.
In a report put up on its website late on Wednesday, the paper said Mr Blair was still determined to keep open the option of joining the single currency later in this parliament.
It cited "Whitehall insiders" as saying that they now expect further wrangling between Mr Blair and Mr Brown on the wording of the finance minister's statement on the assessment.
One insider said Mr Blair would insist "the cup is still half-full" while for Mr Brown it was "three-quarters empty".
The debate over the euro has raged since Mr Blair's Labour government adopted a wait-and-see policy in 1997.
Mr Brown has pledged to deliver his assessment of the economic case for euro entry by the first week of June but is expected do so in May.
Anti-euro MPs say Mr Blair would be mad to tie Britain closer into Europe; relations with France are also fraught over the Iraq war, and the eurozone economy lags so far behind that of Britain.