Britain cannot "sit half in and half out" of the European Union, the prime minister told business leaders on Tuesday night.

Speaking at the annual dinner of the Confederation of British Industry, Tony Blair insisted that the government's policy on the single currency and the infamous five economic tests still stood.

"Whatever people's views on the single currency, it is essential for this country to wield influence in Europe," he said.

"To be set aside, half in and out, isolated, means that when critical issues come up then we will not have the voice and strength that we need."

His comments coincided with the publication of an NOP poll for the Channel Four Powerhouse programme, which showed 39 per cent support for the single currency, with 61 per cent against.

The poll comes as the presidency of the CBI was handed to euro-sceptic Sir John Egan.

In his outgoing speech, president Iain Vallance attacked the government on the domestic front, claiming that the increases in national insurance contributions, announced in last month's budget "left a sour taste in the mouth of the business community".

"Enough is enough. You can't keep dipping your hand into the business till without squandering the UK's advantage as a country in which to do business," he said.

"Trust is hard won and easily thrown away. I hope the sparsity of communication over the budget turns out to be an aberration. Good communications between the government and business are vital to the workings of the economy."

He praised the government's handling of the economy, but accused them of inconsistent policymaking. "The deeds belie the rhetoric," he claimed.

However, the prime minister defended the move as the means of funding large increases in public services investment, particularly in the NHS.

"No one likes paying taxes. Even after the budget we remain a relatively low-taxed economy and one of the best countries in the world to do business in," he said.

"But I was elected to fix our public services, schools and hospitals first - and that is what I intend to do."