The euro debate has started again with a vengeance in Britain and the media is full of conflicting reports about what the Prime Minister and his chancellor are planning.

In a repeat of 1997, when reports that Mr Blair was set to rush into the euro provoked him into ruling it out for the rest of that parliament, in the last week there have been stories that Mr Blair plans to hold a euro referendum next year - or if you prefer, that he has ruled out a referendum altogether. Other reports suggest that his chancellor Mr Gordon Brown is planning to fail the vital economic tests which Labour laid down in order for Britain to join the euro, but is also planning entry by 2003. The truth is difficult to ascertain.

What appears to be happening is that different sources are briefing journalists in different ways depending on whether they work for pro- or anti-euro newspapers or broadcasters.

The truth would seem to be that Mr Blair is keen to keep his options open and Mr Brown less so, although neither is willing to yet rule anything completely in or out. Thus, official policy appears to be to keep the option open of a referendum during this campaign, but to make no commitments. So far they have not even announced when the economic tests are likely to be held, although there is a commitment to hold them within two years of the general election.

These tests are so subjective that almost any economic conditions could give rise to a pass or a fail depending crucially on the view of Mr Brown. There has been a suggestion that with his eye on possible leadership in a third term he will push hard to have his own way.

But this view of a cautious Mr Brown appeared to be misguided following a Financial Times article which said the government had agreed a timetable for euro entry and were aiming for a referendum next autumn or in the spring of 2003. But Mr Brown's Treasury reacted quickly and furiously and a spokesman told Reuters the story was "complete fabrication". Mr Brown later told American business leaders his approach towards possible membership of the euro would continue to be "considered and cautious".

While there were clear benefits to ditching the pound, he said, "to short-cut or fudge the assessment, and to join in the wrong way, or on the wrong basis, would not be in Britain's national economic interest".

A Blair spokesman added insult to injury by stating that the "the report is total nonsense from start to finish".

Nevertheless some observers believe there was some truth to the report particularly regarding the proposed timetable, if Mr Brown says Britain passes the tests.

The logic is that the next election is likely to be in 2005 and according to the government's own changeover plan it would take 24 to 30 months after a "yes" vote to prepare Britain to join the euro. That means a referendum would have to be held by early 2003 or shelved until after the next election.

Observers hope Mr Blair will use the autumn party conference to make his pro-euro position clear. A Blairite think-tank, the Foreign Policy Centre, plans to publish a pro-euro pamphlet at that time along with a draft timetable for campaigning in favour of the single currency.

But the key could be the result of the Tory leadership race in September. If the proeuro former chancellor Kenneth Clarke wins then all three major parties in Britain will be led by men who believe in the euro project.

This would encourage Mr Blair to hold a referendum with a view to ascertaining the damage it would cause to the opposition if the leader were prepared to abandon the pound but the rank-and-file were not.

However, if right-winger Mr Iain Duncan-Smith wins, the party will put up a very vigorous opposition.

Even so, all will be alert to the risk demonstrated by the Nice vote here. All the parties, the trade unions and the Institute of Directors could back the euro, but the public, who are still overwhelmingly sceptical, could still reject it. However, Mr Blair believes he can change that sentiment.

Of course, the euro itself is vital to this. Its poor performance on the foreign exchanges has done little to persuade Britons that this is a strong currency which it is vital they sign up to.

Likely to be just as important is the introduction of notes and coins. If this goes smoothly then millions of Britons who will be using the euro for holidays to France and Spain next year may be persuaded. If the changeover is chaotic, and the press will be watching for any hint of a glitch in the 12-nation euro zone, it will become much more difficult for Mr Blair to sell.

Indeed, the European economy as a whole including Britain, will also be vital to the process. If the economies of Germany and to some extent France remain in the doldrums, many Britons will be cautious. If their own economy follows suit as seems possible at the moment then there will be little enthusiasm for either Mr Blair or Mr Brown.

It is thus possible that the next few years in Britain will not be about scoring euro points but more hanging onto power and scoring enough points to go for an unprecedented third election victory. Irish policymakers hoping for British entry should not hold their breath.