Blair deserves a better place in history than the one for which he is headed

The biggest political headaches spring not from the original error, but from stubborn attempts to deny there's anything wrong

Last spring I told Tony Blair that he could not follow President Bush into a war in Iraq and in the same year ask Britain to follow him into the euro. I could not see how a military adventure, which would be condemned by Germany and France, could promote our prospects for success in a referendum for closer integration with Germany and France.

A year later my warning has proved even more apposite than I had feared. The Iraq war opened the sluice gates on a flood of Francophobia of a virulence that must have made Margaret Thatcher jealous.

The meretricious press campaign against the draft constitution for Europe is a consequence of the prolonged period in which France was pilloried for its doubts about the case for war. Paradoxically the sheer vehemence of the press campaign could be turned to advantage against the Eurosceptics. A fundamental principle of wrestling is that you use your opponent's weight to throw him off balance. The critics of Europe have so overreached themselves with their stories of bogles and ghoulies lurking in Giscard's closet, that they are vulnerable to the retort that their real agenda is a breach with Europe, which is not an agenda the mass of the public will swallow.

It was fashionable in the wake of the fall of Baghdad to praise Tony Blair for his boldness in following his convictions rather than the opinion polls. He may regret hearing rather less of that praise as the case for the war has unravelled, but he cannot now revert to caution as he approaches Monday's announcement on the euro. I do not doubt the direction in which his convictions point. He knows that membership of the euro increasingly defines the core of the union. The members of the single currency are developing natural habits of close consultation and co-operation which will marginalise countries that are not within the loop. If the Government appears to rule out membership of the single currency, it will hobble its own influence on issues crucial to British interests such as reform of the common agricultural policy.

It is therefore vital that even if the decision is not to join now, Monday's announcement is seen as a positive statement of intent to join. Gordon Brown's first declaration on the euro, in 1997, in essence conceded that Britain was so far from meeting the criteria that there could be no referendum for that parliament. On Monday, his bottom line needs to be that Britain is now so close to meeting his famous five tests that there will be a referendum in this parliament.

Road-maps have become a rather overworked political metaphor, but one or two milestones at least need to be established if a statement of intent is to be credible after so much procrastination.

One such milestone would be a paving bill in Parliament to clear the way for a swift referendum as soon as a decision is taken. That would provide a convincing signal to the supporters of the euro in the country and in the business community that this time the Government is for real, and they will not be left isolated again if they spell the economic case for the single currency.

Another milestone will be a clear statement from the Prime Minister that he wants the Cabinet to start making the case for entry. If he seriously does want them to speak up he needed to say so on the record, preferably to camera, so that ministers can have the confidence that if they open their mouths on the euro they will not promptly be sandbagged by the Treasury.

A third of the public will probably never support the euro at any price. But there is another third who are currently opposed but without any deep commitment. They can be won over, but only if Monday proves the start of a vigorous campaign by a Cabinet that sounds confident that joining the euro will be good for Britain.

The single currency calls for political leadership confronting national chauvinism with the national interest. This week's report that membership of the euro would add 0.5 percent per year to GDP is only the latest in a string of reports quantifying the loss of investment and trade as a result of staying outside the world's richest single currency market.

It is difficult, though, in the vogue phrase, to "sex up" such a statistic for public impact. Some friendly papers did their best, translating 0.5 percent of GDP into a hundred quid per head. Tomorrow Britain in Europe have hired a Thames yacht in an attempt to give visible expression to the phrase that billions of pounds in trade have been washed down the river by our failure to join the euro.

But the Prime Minister is perfectly capable of grasping what the statistics mean without a photo-op to dramatise them. He needs to deploy his considerable skills at presentation to get across to the electorate why they would be better off swapping the pound for the euro. And he needs to put his own authority and credibility on the line behind a "Yes" vote.

Which brings us back to Iraq. Success in a euro referendum first requires the Prime Minister to repair the damage to his credibility from the prolonged difficulty in producing an actual weapon of mass destruction anywhere in Iraq.

Personally I never thought the Prime Minister acted on Iraq in anything other than good faith. On the contrary, the problem may have been at the other extreme. The burning sincerity with which Tony Blair believed in the case for war may have led him into seizing too uncritically on those pieces of intelligence that supported the conclusion he had already reached that war would be justified.

For me the growing problem over the credibility of the Government is not that they attempted any deliberate deception, but that they still refuse to accept they made any error.

At Prime Minister's Questions, I invited the Prime Minister to accept that, albeit in all good faith, he may have provided wrong information on Saddam's alleged attempt to buy uranium from Niger. This was not a tough test. The background documents were comprehensibly exploded as crude forgeries three months ago.

Yet the Prime Minister could not bring himself to say he had been wrong. Instead, he insisted on the need for more time to assess the intelligence. That really does lack credibility.

All the biggest political headaches spring not from the original mistake, but from stubborn attempts to deny that there was anything wrong. The Government will not put this particular headache behind them until they face reality and admit that the claims they made about Saddam's weapons have turned out to be wrong.

Tony Blair does need to put this issue behind him. He does not deserve to go down in history as the prime minister who took Britain into Iraq on the basis of faulty intelligence. He should be remembered as the leader who recognised that Britain's destiny was in Europe. But he will only secure that place in history if Monday marks the start of a committed drive to bring Britain into the euro.