The government is "completely at one" on the euro, a Treasury minister told MPs on Tuesday.

Responding to Conservative charges that ministers were fighting "like ferrets in a sack", economic secretary Ruth Kelly told a Westminster Hall debate that Gordon Brown and Tony Blair were as one on the European single currency.

"The chancellor and the prime minister are completely at one on what our policy toward the European single currency is - that we are in principle in favour but in practice we must meet the five economic tests," she said.

"The determining factor underpinning any government decision on membership is the national economic interest and whether the economic case for joining is clear and unambiguous."

Speaking during the first Westminster debate on the euro since the introduction of the currency's notes and coins on January 1, shadow Treasury chief secretary John Bercow accused the government of being at war with itself "on an issue of the most vital national importance".

"This internecine conflict which is raging at the heart of government is unedifying for observers, it is undignified for its participants but above all it is a betrayal of the people of this country on an issue of the most vital national importance," he said.

"I think it is time that we ceased to have a government policy mired in contradiction, deception, humbug and superficial thinking. We are owed an explanation of what this government is really about."

Dominating the debate was the so-called "sixth test" of currency exchange rates, the level at which the pound could be pegged to the eurozone, and Bercow raised the spectre of the ERM.

"The euro is about who sets the interest rate for the members of the euro zone. We know the desperate damage that can be done in terms of repossession, of bankruptcies, of lost jobs in our own economy when we were in the temporary but horrendous straitjacket of the exchange rate mechanism," he warned.

"To go from that to permanent incarceration does not seem to me indicative of much common sense by the government."

Lib Dem Treasury spokesman Edward Davey argued that euro entry was a primarily political judgement and called on the government to make clear the most important judgement of all - the exchange rate level at which the UK would join the single currency.

But Kelly said she "fundamentally disagreed" that the government should attempt to artificially massage the pound's the exchange rate down to a suitable level for euro entry.

"The exchange rate is properly the outcome of sound economic fundamentals and that is why this government has put in place measures such as the new fiscal rules, the monetary framework and independence of the Bank of England," she said.