Mr Wim Duisenberg, president of the European Central Bank, last night vowed to defend its independence and to resist interference from political leaders who have been calling for lower interest rates.

While refusing to forecast future rates, Mr Duisenberg gave the strongest signal yet that European interest rates would converge to the Franco-German level of 3.3 per cent by the end of the year.

And he gave an upbeat assessment of recent economic trends, in a strong signal that the ECB is not too alarmed about the economic outlook.

Speaking after a meeting of the ECB's governing council in Frankfurt, Mr Duisenberg set out clear limits over the extent of policy cooperation between the central banks and governments - a key request by Mr Oskar Lafontaine, the German finance minister.

He poured cold water on Mr Lafontaine's proposal of exchangerate target zones for the euro, the new single currency, and the dollar. He also warned against attempts to weaken the EU's stability and growth pact, which seeks to limit budget deficits.

In a direct reference to recent comments by political leaders, Mr Duisenberg said it was not uncommon for politicians to offer their opinion on monetary policy, but added: "It would be very abnormal for the suggestions to be listened to."

His comments came a day after Mr Gerhard Schroder, the German chancellor, said it should become normal for politicians and central bankers to have a public discussion of monetary policy.

Mr Duisenberg argued that governments had the means to reduce Europe's chronically high unemployment through structural reforms. "I appeal to all political functionaries to recognise that monetary policy cannot solve the structural problems," he said. He warned governments not to let up in their efforts to consolidate fiscal policy.

Mr Duisenberg said the ECB governing council gave the highest priority to interest-rate convergence at this point. He welcomed yesterday's decision by Spain and Portugal to cut rates as part of the process, adding that the timing of the announcement, to coincide with the council meeting, was no accident.

The European Commission, meanwhile, defended the independence of the ECB, warning that this was "crucial . . . to the credibility of monetary policy" in the eurozone.

A spokesman for Mr Yves Thibault de Silguy, monetary affairs commissioner, said the Commission felt the independence of the ECB from political interference was a "very clear issue". He added: "There is no question of any instructions being given to the central bank with regard to its monetary policy, nor is it up to the central banks to accept such instructions whether they be from a minister, the government or institutions."