Blair and Brown deny dispute over strategy on euro

Tony Blair and Gordon Brown sought a united front over the single currency last night as they struck a compromise designed to quell speculation that they are deeply divided on the issue.

In an unprecedented move, Downing Street and the Treasury held a hastily arranged telephone briefing for Westminster journalists in an attempt to deny that the Prime Minister and Chancellor were at odds.

Mr Brown was irritated by reports in yesterday's newspapers saying that Mr Blair had wrested control of his grip on euro strategy by allowing the Cabinet to decide the policy statement that the Chancellor will announce on June 9.

In their joint statement Mr Blair dismissed speculation that he wanted to call a referendum before the next general election whether or not the Treasury's five economic tests for joining were met. In turn, Mr Brown denied that he was against a referendum in this parliament, and promised to campaign fully for a "yes" vote if his tests were passed.

The two men also pledged to stand together on the issue once the Government's position was agreed.

The surprise statement did not change the Government's policy and was seen by some Labour MPs as an attempt by Mr Brown to scotch suggestions that he had been outmanoeuvred by Mr Blair's decision to give the Cabinet a decisive say on the euro.

Downing Street and the Treasury stressed that Mr Blair and Mr Brown presented a "totally united front" at Thursday's cabinet meeting, and made clear that the "dogmatic positions" ascribed to them by media reports should be ignored. They added that Mr Blair had paid tribute to the rigorous economic assessment carried out by the Treasury.

The joint statement went on: "Stories that [Mr Blair] was determined to call a referendum this parliament come what may and regardless of the five tests were wrong. The Prime Minister emphasised the importance of the five tests. If it was the right thing to go in, based on this rigorous assessment in the long term national economic interest, then we do. If it is not, we don't.

"The Chancellor, for his part, equally sought to assure cabinet colleagues the ritual presentation of him as being more sceptical than the Prime Minister and that as a matter of principle he opposed a referendum this parliament are wrong." If the tests were passed in time for a referendum before the next election, Mr Brown would "fight every bit as hard as the Prime Minister for a Yes vote", it added.

No 10 and the Treasury said: "Once the decision is taken, the Prime Minister and Chancellor will be on exactly the same page in total command of all the arguments."

Mo Mowlam, the former Northern Ireland secretary, claims today that Mr Blair and Mr Brown are divided on the single currency. Writing in The Independent, she says: "The euro seems to be more about competing views in No 10 and the Treasury; sadly, more politics of the personal leading to uncertainty and an absence of intelligent debate involving the people."

She calls for an early "double referendum" on the euro and the new blueprint for the European Union being drawn up by a convention headed by Valéry Giscard d'Estaing, the former French president. "I believe that these arrangements are going to be just as constitutionally important as the euro, and a referendum on them should therefore take place," she says.

Her call will not be welcomed by the Government, which has ruled out a referendum on the new EU constitution and insisted it will be only a "tidying up exercise".