Britain's second-biggest trade union, Amicus, has called for the UK to join the single European currency sooner rather than later.

Amicus said most of its 1.1 million members would vote in favour of the euro if there was a referendum now.

Let's get the debate started so we can act to save the UK's manufacturing industry by joining Roger Lyons

The call comes as Denmark signalled its intention to hold a fresh referendum on the euro, adding to pressure on Prime Minister Tony Blair, who is anxious to avoid being isolated in Europe.

The government has promised to decide by the end of June whether it believes euro membership is in the interests of the British economy.

'Overwhelming'

In his New Year message, Mr Blair said joining the euro was Britain's biggest decision for a generation.

The political case for joining was "overwhelming" but a referendum would only be called if the economic case was made, he said.

This point was echoed by trade and industry secretary Patricia Hewitt, who told BBC Radio 4's Today programme: "The central issue you have to look at isn't the politics, it's the economics."

Tests 'met'

However, Nobel Prize winning economist Robert Mundell, who laid the theoretical foundations for European monetary union, said the economic case for joining could never be "clear and unambiguous" as the government has said it must be.

Union wants early referendum

He said Chancellor Gordon Brown's five economic tests had been met to a "high degree", but the decision to enter the eurozone was also, by definition, a political one.

Prof Mundell told Today: "There is always an element of doubt, of imponderables, a lot of issues that just can't be measured.

"The big issue for Britain is how Britain sees its mission in the next half century ... a lot of politics is very much involved in it."

Exchange rates

Joining the euro would be a major boost to the UK's financial services industry and would increase foreign investment, Professor Mundell argued.

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But the exchange rate at which the UK joined the single currency was also an important factor, and would have the biggest impact on jobs.

"The best way for Britain to integrate with the euro and to establish synchronization with the euro area's business cycle is to fix the pound to the euro and let the monetary policy work itself on that basis," Professor Mundell argued.

He said Mr Brown had devised the five tests to "give him a particular importance in making the decision".

Union poll

In a survey of 2,000 members of Amicus, the science and engineering union, more than half said they would vote to join the single European currency.

But a third of those questioned said they would not want to join.

Amicus' joint general secretary Roger Lyons said: "In order to put our manufacturing industry back on a competitive active footing within Europe we need to join the euro sooner rather than later.

"Let's get the debate started so we can act to save the UK's manufacturing industry by joining."

John Teirney, the union's national secretary for Ireland, said the transition had gone smoothly in the Irish Republic.

"Interest rates would be higher here if we were outside the eurozone, which is good for those of us with mortgages and other loans."

Isolation fear

Denmark has said it could hold a referendum on the euro in 2004 or 2005.

Sweden has already announced plans for a referendum in September, raising the prospect of Britain becoming the only EU member outside the eurozone.

Meanwhile, the anti-euro No Campaign is reportedly considering a move to the Labour party's former headquarters in Millbank Tower

Pro-euro group Britain in Europe recently moved from Victoria to new headquarters in Frampton Street, North West London, in preparation for a referendum campaign.

Lib Dem opposition

In a separate development, Liberal Democrat MP Alistair Carmichael has declared his opposition to euro entry in the current Parliament.

Mr Carmicheal said the Lib Dems needed to "re-appraise" their approach to European integration, arguing reform was needed.

The Orkney and Shetland MP joins a small band of anti-euro Liberal Democrats, which includes legal affairs spokesman John Burnett and culture spokesman Nick Harvey.

The No Campaign said it planned to concentrate on developing support in the Lib Dem ranks in the next few months.