Labour MEP Simon Murphy has warned that Britain will pay a high price if it remains outside the European single currency.

In a speech at the party's Brighton Conference on Tuesday, Murphy said that chancellor Gordon Brown will find it difficult to implement his ideas for reforming the European Central Bank or to exercise influence over other European institutions as long as Britain is outside the eurozone.

The leader of Labour in the European parliament backed an early assessment of whether the UK meets the government's five economic tests for membership of the single currency. He warned that there was also a sixth test - the cost of staying outside the single currency."We may be warming up for a referendum, but the game goes on without us. Sitting on the bench is not cost free. The longer we wait before we make up our minds, the greater the risk of relegation from the European superleague. The costs are clear.

"The costs of lost profits and lost jobs as British businesses fight against continental competitors free from exchange rate instability and who trade in one currency. The costs in lost influence," he said.

Murphy went on to warn: "Opinion polls show that many people oppose our membership of the euro. Yet the same opinion polls show that even more think that one day we will join. Delay too long and we lose any chance of influencing how the euro will work."And we are losing that influence now. Gordon [Brown] has some excellent ideas to reform the European Central Bank. But eurozone finance ministers would be far more likely to listen to him if we were inside the euro."

He echoed the concerns of many unions who are worried about job losses in manufacturing, saying that the message from those worried about their jobs is clear, "any unnecessary delay is damaging to Britain."

Murphy said that the longer Britain stays outside the euro, the greater its loss of influence will be.

He also made a damning indictment of the way the European Union operates.

He said that if even an MEP found it difficult to understand the Nice Treaty, it was "no wonder the most devastating slogan in the Irish . . . referendum was 'If you don't know, vote no'".

He called on the EU to go back to basics but added that "all too often the achievements of European cooperation go unseen".