Tony Blair says Britain must keep its "options open" on the euro

The economics were not right for him to recommend a "yes" vote in a referendum, and were unlikely to change, he said.

"If the economics aren't right... you don't do it," Mr Blair told Sky News.

The Tories said Labour's lack of clarity was "bad for Britain". The Lib Dems said it was odd the prime minister was pre-judging ongoing economic tests.

When asked whether he planned to hold a referendum on joining the euro, Mr Blair said: "At the moment it doesn't look very likely, does it, because the economics aren't in the right place.

"If the economics aren't right, if it won't help your country economically, you don't do it."

None of us has the slightest idea whether the prime minister is ruling it out or not ruling it out Oliver Letwin, Shadow chancellor What's happened to Europe?

And he added that it did not seem likely that the economics were "going to change dramatically".

"Now, at the moment there is no part of business and industry clamouring to say we need this for our economy, so it doesn't look very likely," he said.

"On the other hand, things can always change and the sensible thing to do is keep your options open."

At Labour's morning news conference on Thursday, Mr Blair sought to clarify the comments saying: "Politically the case for going in is strong - economically we have to meet the tests."

Mr Blair's comments follow a speech earlier in the week in which Chancellor Gordon Brown stressed the Treasury's five economic tests must be met before the government would put the issue to voters.

Shadow Chancellor Oliver Letwin told BBC Radio 4's Today programme that people did not know whether under a Labour government "they would or wouldn't see the euro".

"None of us has the slightest idea whether the prime minister is ruling it out or not ruling it out. And that's bad for Britain. It's bad for our economy. It's bad for our business."

Five tests

Under a Tory government, however, it was clear that Britain would not join the euro, he said.

This was because the Conservatives believed "the Bank of England was the right set of people to set interest rates for this country" and thus opposed the euro.

Liberal Democrat Chairman Matthew Taylor said his party had understood that the Chancellor was "carefully analysing five economic tests and reporting to Parliament regularly" on the issue.

"It is odd for the prime minister to prejudge this ongoing process on a television programme.

"Britain's decision whether or not to join the euro is one of the most important decisions this country could take, and should be a matter for the British public in a referendum."

The Lib Dems advocate joining the euro subject to the right economic conditions and a referendum of the British people.

UK Independence Party leader Roger Knapman said the euro currency was now a "political risk" and that US banks were advising people borrowing in euros to pay higher interest rates.

"We don't wish our neighbours any harm economically but it looks as though those who've joined the euro are going to be in serious trouble before we're much older," he said.