Cabinet papers haunt currency celebrations

After all the fanfares and the ceremonies a stark warning has emerged from the past to taunt Britain's euro enthusiasts still recovering from celebrating the single currency's arrival.

After all the fanfares and the ceremonies a stark warning has emerged from the past to taunt Britain's euro enthusiasts still recovering from celebrating the single currency's arrival.

Released from Whitehall's archives under the 30-year secrecy rule, confidential cabinet papers warn that if Britain joined what was then known as the Economic and Monetary Union, it would enjoy less power over its economic affairs than the average American state.

The cabinet sub-committee report, ordered by Edward Heath when he was Prime Minister to consider the financial implications of the Government's approach to Europe, concludes that the union held "revolutionary long-term implications, both economic and political".

Correctly forecasting that the issue was likely to become the "central point of political controversy" because of the strong feelings it would provoke about loss of sovereignty, its final conclusions make gleeful reading for euro sceptics.

"At the ultimate stage economic sovereignty would to all intents and purposes disappear at a national level and the community would itself be the master of overall economic policy," it says.

The report would also have made uncomfortable reading for Sir Edward, who was beginning a sustained campaign to soften British attitudes to Europe in preparation for entry to the EEC in 1973.