British Prime Minister Tony Blair has agreed to rule out an early referendum on the country's entry into the euro, the Financial Times reported today.
The FT said that Blair's decision came after Chancellor of the Exchequer Gordon Brown insisted that five key economic tests set by the government pointed to a decisive conclusion against entering the single European currency.
Blair had already privately ruled out a referendum this year, but was still determined to keep open the option of joining the euro later in the current parliament, which could run until 2006, according to the London business daily.
But the chancellor's downbeat assessment of the five economic tests also made the prospect of a referendum next year look highly unlikely, the paper added.
Brown, who is reported to be less keen than Blair on ditching the pound, has laid out five economic tests to decide if joining the euro is in Britain's best interests. But a document presented to the prime minister by the chancellor two or three weeks ago suggested Britain would fail four of the five tests, the FT said.
The file concluded that only the least important test - whether joining would benefit the financial services industry - was likely to be passed.
The document raised fundamental questions about whether the euro zone economies were flexible enough to allow for the effective operation of a single monetary policy, according to the FT.
Blair's government has announced a deadline of early June by which to decide whether or not to hold a referendum on whether Britain should enter the euro.
