A British cabinet minister has warned that Europe could be plunged into war if the euro was to collapse.

Liberal Democrat Business Secretary Vince Cable said the potential consequences of the failure of the euro were "incalculable".

He said there was no automatic guarantee that Europe would not disintegrate into conflict.

Mr Cable spoke during an event at the Cheltenham Literature Festival called "Austerity, the euro and us".

He said last week's awarding of the Nobel Peace Prize to the European Union was a reminder that the European project was devised to rescue Europe from extreme nationalism and conflict and "there is no automatic guarantee that won't return".

Mr Cable described the euro as "very valuable" and had to be maintained, otherwise Britain would suffer.

"We are not in the eurozone so we cannot directly influence it. We will be heard very loudly if it does unravel," Mr Cable told the audience.