Coy:Blair

Tony Blair was attacked by both supporters and detractors of the euro after his New Year message said it would be "massively in our interest to join" but did not say when.

His statement gave not even a vague prediction of when a move to join the currency would come, which brought claims from the opposition that he is sitting on the fence.

Former Tory deputy prime minister Michael Heseltine went further by accusing Blair of cowardice.

Blair used his statement to give broad backing to joining the euro but then retreated into the well-worn defence of the chancellor's five economic tests.

"The New Year sees the introduction of the European single currency. With so much of our trade and so many of our jobs tied up in business with the rest of Europe, it is massively in our interests that the euro succeeds. In any event, it is vital since so many companies will trade in it and it will affect our own economy, that we are prepared for it. It remains the government's policy to join the euro provided that the five economic tests we have laid down are met and the British people give their consent in a referendum," he said.

In his message to the nation the prime minister also hinted at his frustration at Stephen Byers over the state of the rail network.

"There remains huge frustration at some of our public services, particularly the railways. I am not going to pretend we can put our transport system right quickly. It will take sustained investment and a constructive long-term partnership between the public and private sectors," Blair said.

Much of his statement was dominated by the events of September 11 and the continuing war in Afghanistan.

"As the international community looks back on one year, and forward to the next, it can be immensely proud of the way it responded to the attack upon humanity that took place on 11 September, and the UK can be proud of the role we are playing on all fronts, military, diplomatic, humanitarian," Blair said.

He also used the opportunity to reaffirm his support for people working in the public sector. Downing Street is determined to continue with the reform programme for the health service and transport which will put Blair on a collision course with the public sector unions.

"This government believes in public services and is committed to putting in the investment and reform they need. But we know that nothing we plan is possible without the skill and dedication of the people who work in them," he said.