The economy could become more vulnerable to economic downturns if Britain joins the euro, a report published on Monday claimed.

If Britain had joined the single currency in 1999 the economy would have experienced boom and bust, it argues.

The study warned that Britain is four times more sensitive to interest changes and could be forced into recession by a downturn in the housing market.

British membership of the euro would mean that interest rates would be unlikely to fall in the event of a reduction in house prices.

The study, conducted by Oxford Economic Forecasting, suggests that this would result in a slowdown in house prices having a more significant impact upon the economy as a whole.

It warns that this is an "important risk" of euro membership which must be taken into consideration before Britain signs up to the single currency.

The research was commission by the "No" campaign which claims it shows the UK's housing market is a "major obstacle" to euro membership.

"If we give up the ability to set our own interest rates we will have no way of reacting to changes in the property market," said George Eustice, the campaign's director.

Peter Barton, deputy Chairman of Alliance and Leicester, said: "Getting the balance right in the economy is not easy at the best of times. It would be far harder without an independent monetary policy.

"It is not just that we have more home ownership, it is the scale of mortgage and consumer debt and the fact that so much of it is variable rate borrowing that makes Britain different."