Britain's euro verdict set for June 9

Britain will unveil its long-awaited verdict over joining Europe's single currency on June 9, after a decision involving all senior government ministers.

Prime Minister Tony Blair's cabinet will reach a final accord, on the biggest British political dilemma in a generation, after a debate stretching beyond a narrow economic assessment of euro entry.

"The announcement on the euro will be made in the House of Commons on Monday the ninth of June," Blair's spokesman told reporters yesterday.

"There will be a special cabinet (beforehand)... for a final discussion of both the euro but also including the wider European strategy of the government."

Blair, who sees the euro as part of Britain's destiny, has promised Britons a referendum if Chancellor of the Exchequer Gordon Brown says the economic conditions are right.

But the finance minister is widely expected to declare that five tests he set in 1997 have "not yet" been met.

Aides say "intensive negotiations" are ongoing between the big two in UK politics about how to present that assessment.

Nobody expects the cautious Brown to say his economic tests have been met but officials say Blair is not prepared to allow him to shelve euro entry for years and wants to keep open the option of a poll before the next election, due by 2006.

Blair fears a loss of influence in the European Union if he rules out euro entry for several years. Brown does not want to risk Britain's economy by rushing in prematurely.

Blair could demand a "road map", laying out future plans to help Britain converge with the EU and allow a currency switch.

Brown conceded the decision was for the cabinet but said "long term economic interests will be the decisive factor".

But by throwing open the decision to the whole Cabinet, which now has more pro-euro then anti- members, the powerful finance minister's grip on the issue may have been loosened.

"The long-term economic interests of this country will be of huge importance in this decision," Blair's parliamentary leader John Reid told reporters. "But of course the Cabinet... is free to take into consideration wider aspects than just the economy."

Opposition MPs said Brown and Blair were clearly at odds. "The government is split and divided on this issue. They are going to row between now and June 9," opposition Conservative leader Iain Duncan Smith told reporters.

Britain is one of three euro zone outsiders in the 15-member European Union. Blair has refused to commit himself either way during six years in power.

Opinion polls show most Britons want to keep the pound. Financial markets pushed the pound up against the dollar and euro on the news. It has fallen sharply against the single currency recently. Sterling hit a three-month high of $1.6235 and moved further away from all-time euro lows.

Brown and his Treasury officials have jealously guarded the economic judgment about switching currencies, infuriating pro-euro ministers and campaigners who see a political imperative to the decision.

"The government should call a referendum now or set out a road map for a referendum in the lifetime of this parliament," Britain in Europe campaign director Simon Buckby said.

Brown did note a new impetus to European Union economic reform which could benefit Britain. "There is a new momentum for reform in Europe," he told BBC Radio.

Both he and Blair have urged the EU to adopt British-style, low-regulation policies to boost growth and job creation.

Blair's spokesman said the prime minister and chancellor would discuss the euro with ministers through next week and beyond before the final cabinet discussion on June 5 or 6.

Ministers will be given Brown's economic assessment on May 26 so they can digest it while parliament is on a 10-day break.

More talks will take place in the week starting June 2 in the run-up to the crucial meeting at the end of that week.

Blair's spokesman said Brown's assessment would feed into a final cabinet decision but, like Reid, signalled that the economics were only part of a broader debate.