The prime minister has given the clearest indication yet that he will join the single currency if the key economic tests are met.

Tony Blair said the country should "go for it" when the time comes.

The best way forward in Europe, he said, was "being in there, vigorous, confident, leading in Europe not limping along several paces behind".

"That's why the euro is not just about our economy but our destiny," he added.

"We should only join the euro if the economic tests are met. That is clear. But if the tests are passed, we go for it."

His remarks were seen as evidence that Downing Street is gearing up for a referendum next year.

John Monks, the TUC chief, said he was confident of an early poll.

"I believe he will go for it next year. I would bet on that. And I think he will win it," he told Sky News.

The prime minister also reaffirmed his vision of a globally intertwined new world order.

Leading his conference speech with a strong proclamation of Labour's internationalism, Tony Blair proclaimed Britain's European "destiny".

He told his party that key questions still had to be answered about the EU's future - but warned he would not stand on the sidelines.

"The single currency is a fact, but will Europe find the courage for economic reform?, he asked

"It has taken the first steps to a common defence policy, but will it be a friend or rival to NATO?

"The answers to theses questions are crucial to Britain."

The Labour leader argued that growing "interdependence" pushed towards international cooperation.

"Interdependence is the core reality of the modern world," he said.

"It is revolutionising our idea of national interest. It is forcing us to locate that interest in the wider international community.

"It is making solidarity - a great social democratic ideal - our route to practical survival."