Gordon Brown is set to reject calls for a euro referendum this year and will tell MPs so next month, the Times predicts.

A concerted effort will be made to soften the blow for pro-Europeans in the Labour Party with a backbench bill allowing for dual pricing of goods in both sterling and euros.

The legislation will be tabled in the first week of next month, at around the same time as the Treasury is expected to conclude that Britain has not met the five economic tests for euro entry.

Tony Blair accepts that there is no prospect of a referendum on the euro this year but is said to be pressing the chancellor to not rule out entry before the next election.

Meanwhile, 92 MPs including Peter Mandelson have signed a Commons motion which calls for a referendum on joining the euro before the end of this parliament.