'No short cuts' vow on euro

ED Balls, the Treasury's chief economic adviser, stamped Gordon Brown's authority on the single currency issue and moved to defuse speculation that a euro referendum could be held early next year.

He said Britain must pass the Treasury's tests for euro membership in a 'durable and settled way' and vowed the tests would not be fudged or short cuts taken.

'Too often in the past in our history, decisions have been made for political reasons which have been seen to override what's right from an economics point of view,' Balls said during a discussion on the euro at the Royal Institute of International Affairs.

He also said the Government had no intention of going back to targeting the exchange rate, since this would involve ditching its inflation target and would be a 'retrograde step'.