Former Northern Ireland secretary Peter Mandelson has predicted that Labour will "seize the chance" to hold an early referendum on joining the euro.

But his claims have been contradicted by former prime minister John Major who has said he thinks it "very unlikely" that a referendum will be held during the current parliament.

Writing in Thursday's FT, Mandelson, who remains close to the prime minister despite his departure from government, says Tony Blair will act out of belief and conviction if he decides it is in Britain's interests to join the euro.

"If an opening is created during the course of this parliament, I believe he [Blair] will wish to seize the chance and not wait for the opinion polls to turn in favour," he writes.

But he concedes that there is substantial public hostility to euro membership, admitting that "I do not believe a referendum will ever start with the pro-euros ahead of the anti campaigners". He says the British public's hostility to the euro will subside when it becomes clearer that euro coins would retain the Queen's head.

And despite his own well-publicised feud with the chancellor, Mandelson dismisses "misguided" suggestions that a rift between Blair and Gordon Brown will hinder euro membership. Brown will not stand in the way of euro membership "as long as the timing of entry were right", he says.

But John Major has argued that the policy he adopted while in government, "wait and see", remains the best option for the country.

"In my judgment it's still too early to go in. Were there to be an early referendum I for one would vote against entry. But it may be that it will be in our interest to join in due course.

"We really need to see how the euro performs through a complete economic cycle and see, crucially, the extent to which it promotes integration of other policies across Europe and whether the British are prepared to accept that degree of integration," Major said.

"Personally I think it is very unlikely that the prime minister will risk a referendum in the next year or two," he told BBC Radio 4's Today programme. "I think it is quite possible that we will be in by 2012, but that is by no means certain."

He also expressed criticism of his party's current policy, saying it was "politically foolish" to permanently rule out joining the euro. "I set out my policy before most of the current front bench were in parliament," he added.

With euro notes and coins now successfully circulating in the 12 eurozone countries, the debate over the single currency has re-ignited in recent days, but the foreign secretary has sought to downplay the issue of when Britain may join.

Speaking yesterday, following Europe minister Peter Hain's suggestion that membership of the European currency was inevitable, Jack Straw warned that people needed to "calm down" over the issue.

But Thursday's Mirror carries a front page leader urging Tony Blair to "stop your embarrassing dithering" and get on with joining the euro. Britons are "whining about the end of the pound, kidding ourselves we are still some great empire, and ignoring the fact that we're rapidly becoming the continent's laughing stock" argues the paper.