Leading academics have also given their verdict on the chancellor's plans as part of Gordon Brown's marathon investigation.

The chancellor, himself a former academic, set 23 experts an essay deadline for a "short note" of around 4000 words on different issues related to joining the single currency.

The resulting document released as part of the Treasury's conclusions covers a range of issues including fiscal policy coordination and the impact of enlargement.

Their high quality contributions "proved extremely valuable to the Treasury" is the official response.

On enlarging the EU, Professor Paul de Grauwe predicted that a eurozone of potentially 27 member countries will hit the European Central Bank's ability to maintain financial stability.

De Grauwe, claims the cost to the current members of the EU would therefore outweigh the benefits and interest rate decisions would be more likely to go against Britain's interests.

"There is very little the ECB can do about this. As a result, the pressure on countries to increase labour market flexibility will increase, which for most people is not a comfortable prospect," he wrote.

Geoffrey Meen, writing on the impact for the UK housing market, concluded house prices would remain volatile and equity withdrawal could be more likely.

Professor Charles Wyplosz of the Graduate Institute of International Studies warned that Europe's fiscal rules "need a serious overhaul".

He highlighted a series of problems including flaws in the stability and growth pact.

"The failure of the SGP to live up to the ambitions of its inventors reveals the dangers inherent in across-the-board rules that do not provide for enough flexibility in the face of unexpected events," he concluded.