A trader at the London International Financial Futures Exchange as trading in the euro began on January 4, 1999.

This article was originally published in the Financial Times on January 4, 1999.

The Liberal Democrats yesterday urged Tony Blair, prime minister, to show leadership and prepare the UK for an early referendum on participation in the european single currency.

Menzies Campbell, the party’s foreign affairs spokesman, said Mr Blair's 179-seat majority in the House of Commons gave him the chance to lead the debate on the euro.

Mr Campbell said the government’s plan to hold a referendum after the next general election, due in 2001 or 2002, was unsustainable.

"The influence of the single currency on the UK and the way we conduct our business will be increasingly felt," he said.

"The government could well find itself swept along by events."

The Liberal Democrats, who have 46 MPs, are the most pro-European party in the UK and are developing increasingly close links with the government.

The party hopes to persuade Mr Blair he could win an early referendum on UK membership of the euro, with cross-party support.

A "Yes" campaign in a referendum would also be supported by a number of senior Conservatives, including Kenneth Clarke, the former chancellor, and Michael Heseltine, the former deputy prime minister.

Meanwhile, former Labour foreign secretary David Owen announced formally he would join campaigners trying to stop UK participation in a single European currency.

Lord Owen warned that the countries signing up to a single currency would effectively become a single state. He said there were also strong economic reasons why Britain should stay outside the euro-zone.

"People aren't stupid, they know when they are being sold a pig in a poke and I think one of the reasons they are still very strongly against the euro is that they know there is more on offer. Effectively this is a big step towards greater integration."

Senior opposition Conservative politicians said the government was trying to prejudice any referendum on entering the single currency, noting that the Bank of England was already printing euro bank notes.

They said the bank's printing presses had produced euro notes in three denominations worth more than a total of £100m.

"Why are these notes being printed if we are not in the euro?" said party constitutional spokesman Nigel Evans.

"It looks like the government's trying to prejudge the referendum."

A spokesman for the Treasury said: "This has no bearing on whether or not we join. All central banks in Europe are printing the notes as a test as part of the general preparations. The cost of the operation - said to be £300,000 - would be recouped by sales to participating members.

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