Brown is "obsessive" says Peter Mandelson

The Tory leader's comments came after ex-minister Peter Mandelson claimed that Tony Blair had been "outmanoeuvred" by Chancellor Gordon Brown over the issue of the UK joining the currency.

In a direct rebuff to Mr Mandelson, the prime minister's spokesman said he was simply a backbencher who was not party to the discussions on the euro held between Mr Blair, Mr Brown and ministers.

But in the House of Commons Mr Duncan Smith sought to capitalise on the apparent differences at the top of the Labour administration.

Liberal Democrat leader Charles Kennedy said the prime minister's position on the euro had become characterised by "dither and delay" thanks to his chancellor.

The latest row over the euro came as former minister Clare Short also claimed a decision to delay euro entry had already been made.

The ex-international development secretary - who quit government last week - said her understanding was that the prime minister and Gordon Brown had agreed a "not yet" verdict on the currency.

Fever pitch

But there are signs that the timetable for the decision may be slipping.

Downing Street originally announced that ministers would be given the assessment of the five economic tests next Monday, 26 May.

Now it has been said the assessment will be delivered "some time next week", sparking speculation that the rows remain far from resolved.

With a long-awaited decision on the euro due in less than three weeks, the debate is reaching fever pitch on the margins of government.

As the last few cabinet ministers meet Mr Blair and Mr Brown to discuss the Treasury's studies into the case for the euro, those outside the inner circle are seeking to fly the flag for their view on the currency.

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Mr Mandelson, who is fervently pro-euro and seen as a close confidante of the prime minister, has been increasingly vocal in pressing for a referendum on the currency within the next two years.

He warned at a Westminster lunch for women journalists on Tuesday that the UK would pay an "incalculable" price if it failed to join the euro.

"Gordon Brown is a politician right down to his fingerprints, 24 hours a day, seven days a week," he told journalists at the lunch.

"Tony is not. If he was as obsessed with politics he would not have let himself be outmanoeuvred by the chancellor in the way that he potentially has."

No clash

The comments are being seen as expressing the frustration among pro-euro campaigners that they will not get an early euro referendum.

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In his response on Wednesday to those comments, Mr Blair's spokesman said: "Mr Mandelson does not speak for the prime minister, he was speaking as a backbencher on his own behalf.

"Only those involved in these discussions know the reality and know the substance."

Mr Brown, meanwhile, has attacked reports of a personality clash between himself and the prime minister over the euro.

In an interview with the Times and a speech to business leaders, the chancellor sought to underline his pro-European credentials and emphasise his unity with Mr Blair.

Ally

The chancellor is expected to announce next month that Britain has yet to pass his five economic tests for membership of the European single currency.

Mandelson is reflecting pro-euro camp's frustration

Liberal Democrat Treasury spokesman Matthew Taylor said: "Peter Mandelson has exposed the growing divisions at the heart of the Labour Party over Europe, which is becoming a test of Old Labour versus New; chancellor versus prime minister."

Interviewed for the Times before Mr Mandelson's comments went public, Mr Brown dismissed the idea that personalities would decide the euro question.

He said: "The central question of Britain and Europe's future in the world cannot be reduced to personality issues without trivialising what are great and major issues about our future."