Brown says Britain 'not ready' for euro, may reconsider in 2004 

Mr Brown said the cabinet will re-run the five tests it has used to assess the possibility of joining the euro area in 2004. To date, Britain meets only one, Mr Brown said. In his speech to parliament, Mr Brown stressed the risk of a housing boom and bust as a key reason for not joining the euro immediately. In the 18 documents that form the Treasury's euro dossier, the negatives heavily outweighed the positives. At the same time, he stressed that "In this statement we strengthen our commitment to and support for the principle of joining the euro."

In the wake of the announcement, Prime Minister Tony Blair telephoned EU leaders to reassure them that Britain was taking a big step towards joining the euro. Meanwhile, the Commission in a statement said that since the "five tests" were part of Britain's "domestic debate", it chose to refrain from commenting on Mr Brown's analysis. "We shall continue to follow the debate in the UK with interest while continuing to pursue further integration within the euro-area", the statement said.

According to pro-euro campaigners, it is still possible that the government will call a euro referendum during this parliament, whose mandate expires in 2006. In the view of shadow Chancellor Michael Howard, the euro decision is about covering up the government's divisions rather than judging what is best for Britain.