Remaining outside the Euro has been "a complete disaster" for UK manufacturing, the inventor and entrepreneur James Dyson said on Sunday.

Warning that manufacturing could "die out" in Britain over the next few years, Dyson has called for improved tax breaks for research and development.

"From a manufacturing point of view it has been a complete disaster not to be in the Euro," he told GMTV.

"Complete disaster because any manufacturer in Britain over the last five years, exporting to Europe has probably been losing money, and that's not healthy, it means that manufacturers in Britain don't want to make in Britain, they've got to go and make somewhere else so they're not susceptible to a strong pound."

He says the pound and the Euro will converge ahead of membership.

"The moment they say they're going in the currencies will merge naturally, then I think that manufacturing will breathe a sigh of relief."

Asked what would happen if the government did not take action to help manufacturing, Dyson said: "Well I think it will die out, I think it's unfortunate that it's going away very quickly."

He warned that the demise of the sector could come in "just a few years" unless immediate action was taken.

Dyson's comments come as the prime minister is said to have given the strongest indication yet that he considers British entry to the European single currency inevitable.

"The Euro is now a reality for 300 million Europeans. It has been accepted by business and consumers alike, making transactions across the Continent simple, effective and transparent," Tony Blair writes in a foreword to the German-British forum.

"That is why I'm in favour of Britain joining the Euro. Our five economic tests will determine when.

"The final say will rest with the British people in a referendum."