Cabinet unites behind 'route map' to euro entry

A "route map" for Britain to join the euro is likely to be published when Gordon Brown delivers a "not yet" verdict on the single currency on 9 June.

After the Cabinet discussed the issue yesterday, pro-euro ministers were confident that the Chancellor's announcement will leave the door open for a referendum before the next general election. One Cabinet minister said last night that a referendum in this parliament was "more likely than not".

But the Government's attempt to put on a united front was undermined when Denis MacShane, the Minister for Europe, said a referendum was winnable but could result in "an all-out internal civil war". Later he insisted he was not talking about divisions in the Cabinet but in the country as a whole.

Cabinet ministers predicted that the Chancellor's long-awaited statement would be more positive about the prospects of euro entry than previously expected. Mr Brown will spell out a series of hurdles to be cleared before a referendum is called.

This "route map" is likely to include the introduction of fixed rate long-term mortgages to bring the British housing market into line with the continent; regional pay bargaining; and switching to the same 2 per cent inflation target as the European Central Bank.

Such a decision would be seen a compromise between Mr Brown's belief that his five economic tests have not been met and Mr Blair's desire to call a referendum before the next election.

Another minister said the language in the statement would be "pro-European" to reassure euro supporters and EU countries that the Government saw Britain's destiny in the single currency.

The Cabinet will be sent Mr Brown's recommendations on the euro next week. It will have a detailed discussion on 5 June about the Commons statement he will make on 9 June, which is likely to be honed by the Chancellor and Prime Minister over the intervening weekend.

Ministers believe they have influenced the final verdict. Patricia Hewitt, the Trade and Industry Secretary, and Charles Clarke, the Education Secretary, are said to have fought hard for a positive statement during their individual meetings with Mr Blair and Mr Brown earlier this week.

Mr Blair said yesterday there was an "emerging consensus" in the Cabinet. The statement would reflect both the economic tests and Britain's long-term future as a "fully engaged" member of the EU.

The Prime Minister told a Downing Street press conference: "It is has got to be on the basis of the long term. Not simply where people are at different stages of the economic cycle, but where you believe the long-term interests of your economy lie."

Mr Blair rejected calls for a referendum on theblueprint for the EU proposed by a convention chaired by the former French President Valéry Giscard d'Estaing. He accused Eurosceptics of wanting Britain to "turn our backs" on Europe, insisting that it was "nonsense" to suggest that the convention's plans would fundamentally alter the nature of Britain as a nation state.

He said: "When people really think about Europe, I think they will realise it is important for this country to be part of Europe. They will realise that if you are to be part of it there is no point being a destructive member of Europe. You might as well be a constructive member, fully engaged."