Donald Macintyre: We are growing accustomed to the idea of the euro

'Mr Blair's words on the euro were a clear message to the country - and also to Mr Brown'

Labour conference

Blair ready to step up campaign for euro

Blunkett to scrap asylum vouchers in shake-up of immigration rules

Reid urges Ulster groups to disarm

Conference Sketch: Simon Carr

There is an ugly buzzword to describe the calculated nugget of information on the euro that accompanied the idealistic agenda for a new world order outlined by Tony Blair with great clarity on Tuesday.

There is no "campaign" to soften up public opinion on the euro. Instead, there is something called "accustomisation" – a gradual process whereby the public is exposed, at decent intervals, to the idea that the Prime Minister may risk a referendum on British entry to the single currency in this parliament. It is safe to assume that Mr Blair will also be doing a bit more "accustomising" in his big speech at the Guildhall next month.

Yes, he did it without changing policy. The sentence is still a conditional one. The economics, it is allowed, could well make entry impossible. But that doesn't mean its significance has been inflated in the telling. In the summer, there was a widespread – and probably exaggerated – assumption that euro-entry was off until a third election. That assumption is no longer tenable. The Prime Minister wants entry; he wants it as soon as possible. And he is convinced he can win a referendum. No other interpretation is possible; no other was intended.

The question is whether, in a transformed international climate, economic as well as political, he will get what he wants. It's a question that has several parts, the first of which is genuinely, in the broadest sense, economic. The Prime Minister, let alone the Chancellor, would need to be satisfied that the exchange rate was at an acceptable level, which at present it isn't. Most ministers familiar with the topic assume that the rate would have to be close to about DM2.80. Here the omens are opaque; most people expect the euro to become stronger against the dollar at some point, but don't know when.

This matters more to the markets than what the Prime Minister says. There is not, nor will there be, a concerted effort to "talk down" the pound. On the other hand, every bit of "accustomising" he does ought to exert admittedly modest downward pressure on the pound, which his remarks in Brighton have done. So it's worth remembering that this convergence would be very desirable, as any of the Labour MPs assembled in Brighton last week whose constituencies are concerned with manufacturing would quickly tell you. It would also make euro entry more possible, though for many of them this is incidental.

Then there is the question of how serious Europe is about economic reform, which is linked, of course, to the bigger question of the euro's capacity to rise in value. Here the Barcelona summit next spring will be crucial. If the French, for example, can be persuaded to set a date for energy liberalisation – if not immediately, at least after the subsequent presidential elections – it could have a profound impact on how fast the euro rises against other currencies, and therefore on the convergence necessary for British entry.

The second variable concerns the prospects for a referendum. The conviction among pro-euro forces that a referendum is winnable has been paradoxically strengthened by the election of Iain Duncan Smith as Tory leader. The fear among anti-euro organisations like Business for Sterling is that the Tory party could contaminate the "no" camp in a referendum. But the Tory party is not likely to become more popular because – whatever Mr Duncan Smith's merits compared with those of Mr Hague – it hasn't changed. Moreover, Mr Blair has left no space for a eurosceptic Tory party to attack him for being insufficiently robust in support of the US in the wake of 11 September.

It's true that if the European elements of the anti-terror coalition start to flake, this could swiftly win Europe a bad name, in contrast to the strength of Britain's alliance with the US. But it's equally true that opinion research suggests that hard-core eurosceptic voters are not as driven by the Manichean preferences for America over Europe in the way the Tory leadership is. Indeed it looks as if, in the way of true isolationists, they are almost as suspicious of overly close ties with the US as they are with the EU. The choice posed by Tories between the EU and the US is not as clear to most voters as it is to Mr Duncan Smith.

The same research, finally, confirms anecdotal evidence garnered during the election that a high proportion of voters, while suspicious of the euro, believe they are not well enough informed to make a considered decision.

There is another point about the risk involved in a referendum, a risk that Mr Blair suggested on Tuesday the Government should have the "courage" to take if the economics are right. Even though a defeat would be deeply damaging to the Government, it would not end its chance of winning the subsequent election. Far from it. Why not? Because the europhobic stalwarts of the Tory party, heady with having defeated euro entry, would almost certainly start to agitate for withdrawal from the EU altogether – a course calculated to reduce rather than reinforce their chances of defeating Labour in a 2005 election.

The third variable, of course, is the enigmatic position of the Chancellor himself. Despite Mr Brown's fulsome words of praise for the Prime Minister on Monday (he referred to him both as the Prime Minister and Tony – something he does very rarely in public), there is no sign that the chronic tensions between the two men and their acolytes has abated, even in the midst of an international crisis. And even though Mr Blair's much-discussed and so far masterly handling of the conflictappears to have overshadowed the Chancellor, it is a grave mistake to underestimate him.

Mr Brown has some formidable weapons at his disposal if, as some believe, he wants a decision on the euro postponed to the next parliament. The Blairites accept that they cannot win a referendum without the full-hearted and absolute support of the Chancellor of the day. And Mr Brown can assimilate some of his well-justified concerns – for example, about the unaccountability and inadequacy of the European Central Bank's remit – into the five economic tests for which he believes himself solely responsible.

If war in Afghanistan fails to achieve its objectives, the Prime Minister's position could become more difficult. But that isn't how it looks at present. Mr Blair's authority is not only stronger than it was on 10 September, when he faced a battle with his party over public service reform; it is arguably – and extraordinarily – stronger than it has ever been.

That cannot be discounted as a factor in his dealings with Mr Brown. If it is sustained, his capacity to persuade Mr Brown not to baulk him will also remain strong. He certainly wants to avoid either a terminal bust-up of the relationship he still regards as critical to the Government's success, or, even worse, the loss of a Chancellor for whom he has often stated his deep admiration. But it no longer looks as likely as it once did that it will be Mr Blair who blinks first. His words on the euro on Tuesday were a clear message to the country. But they were also a clear message to Mr Brown.

d.macintyre@independent.co.uk