Government divisions on the euro are overshadowing the UK's contribution to a key debate over the EU's future, believe the Lib Dems.

Thursday's speech by Jack Straw on Europe's future conspicuously failed to mention Britain's future in or out of a crucial EU institution - the single currency - and follows on the heels of a storm triggered by Europe minister Peter Hain.

Hain's call for an accelerated timetable on the euro - a referendum next year and full euro-zone membership and the scrapping of sterling within three years - had been slapped down by senior Labour and Treasury sources.

The Sun reports that following Hain's intervention, the euro-cautious Gordon Brown warned colleagues "to get a grip", demanding that the Europe minister's boss, Straw, give a full explanation.

A "senior Treasury source" moved to dismiss the comments as "idle speculation" and accused Hain of irresponsibility.

"What we don't need is the random musings off on market sensitive information," said the source.

"Gordon is sending a clear message about what should be happening here. No decisions have been taken about the timetable for referendum. The Treasury will not engage in idle speculation and neither should other ministers."

Reports also indicate that the foreign secretary was none too pleased when Hain made the comments without first clearing them with him, casting a shadow over a keynote Straw speech to the Hague.

The row has prompted Lib Dem foreign affairs spokesman, Menzies Campbell to question the extent to which a government so divided on the euro can influence the EU, even raising the spectre of Labour's fratricidal battles of the eighties.

"There is little prospect of the UK exercising influence for change so long as the government displays such deep divisions over the single European currency. The feuding over the Euro within the Labour Party is eerily reminiscent of its civil wars of the 1980s," he said.