Peter Mandelson has warned that remaining outside the single currency will limit Britain's influence inside the European Union.

The former Northern Ireland secretary suggested that if the current review of the Treasury's five economic tests is negative, the government should take a "final look" at the issue next year.

Such a move would still allow time for a referendum to be held before the next general election.

Downing Street moved to distance the prime minister from the remarks by one of his closest political allies.

"I'm not sure whether the prime minister has a copy of Peter Mandelson's speech," said the official spokesman.

"Mr Mandelson says he is not speaking for the prime minister; therefore he is not speaking for the prime minister."

Addressing the London Chamber of Commerce, Mandelson was warned Gordon Brown that staying out would cost Britain jobs as well as political influence.

Reports suggest that Tony Blair and the chancellor have agreed to rule out euro entry for the time being, but not for the rest of the current parliament.

Blair, who remains close to Mandelson despite his departure from the Cabinet, wants to keep open the option of a referendum campaign next year ahead of a general election in 2005 or 2006.

The Hartlepool MP warned that foreign investment could begin to drift away from Britain if the government puts off a referendum until after the next general election.

To postpone a decision any longer, he suggested, would leave the UK outside the euro until 2010 at the earliest, allowing time for a referendum to be won and the necessary conversion process to take place.

"If business takes seriously the belief of no single currency for Britain before 2010 at the earliest, then the loss of confidence will be severe," he warned.

"And it will be investment, jobs, growth and productivity in Britain that will suffer."

International businesses would turn away from "another Duke of York act of marching the troops up the hill and down again".

A statement that only promised another look "sometime in the future" or in "the next parliament" would be taken to mean "never" in reality, he was to say.

"There is still time to get this decision right. I hope, for all our sakes, the door is not slammed shut again."

To do so would be to voluntarily exclude Britain from the centre of European power, he suggested.

"Britain cannot be a leader in Europe if it is not part of Europe's core and that core is defined by Europe's single currency," he claimed.

"While remaining half in, half out of Europe, we not only deny the UK economy the benefits of being part of the eurozone, but we sacrifice the vital political influence we need across the whole range of European policies."

Newspaper reports on Tuesday suggested that European insiders believe that a British decision to stay out of the euro will reduce Britain's ability to influence the future shape and direction of the EU.

Britain, Sweden and Denmark - the three EU countries that have not joined the single currency - have now been excluded from preparations for the monthly "eurogroup" meetings.

Robin Cook, a former foreign secretary, is also said to be set to warn that ruling out a single currency for this parliament would have serious political and economic consequences.

Cook, who resigned as leader of the Commons over the war in Iraq, will join the debate on the euro next week when he will call for early membership at a meeting to be staged by the Britain in Europe group.