The prime minister should not allow the Kelly affair to overshadow the campaign to persuade the public to support British membership of the single currency, Peter Hain has said.

In an interview with the FT newspaper, the outspoken Commons leader warns Tony Blair against losing the momentum built up before the summer recess.

Hain said he was confident that the pro-euro cause would triumph once it is "put to the test".

"Despite the important attention that events of the past few weeks have commanded and whatever the outcome of Lord Hutton's inquiry strategically it is essential we do not lose momentum in ensuring Britain remains, and indeed enhances, its role as a leading European power,'' he said.

The British people are not as hostile to Europe as newspapers suggest, Hain added.

"When the pro-European argument is put to the test and this applies to the pro-euro argument too...it wins," he said.

"When the crunch comes and people confront the hard choice of being at the heart of Europe or being isolated... people overwhelmingly vote for a pro-euro position."

Hain, one of the Cabinet's leading pro-Europeans, is pressing the case for an early referendum on the euro.

But he is facing resistance from ministers who believe the public has not yet been persuaded of the merits of British membership.

In next year's Budget the chancellor will announce whether he is set to re-run the five test assessment.