Peter Mandelson yesterday used a weekly meeting of the Parliamentary Labour Party to apologise to Gordon Brown over remarks he made to journalists in which he claimed the chancellor had out-manoeuvred the prime minister on the euro.

Mandelson told MPs: "I welcome Monday's statement to parliament as a real basis for unity around which we can now campaign positively."

He also said he made widely reported remarks that "had been magnified and distorted for which I would like to apologise to Mr Brown".

One MP said the chancellor showed little reaction. At the same meeting, the prime minister ordered his MPs to "sell" the benefits of joining the single currency.