The government has denied that it is planning to give foreign nationals living in the UK a vote in any euro referendum.

A Number 10 spokesman said no decision had yet been taken after the FT reported that British residents from other EU member states could be allowed to participate in the poll.

But the FT said that a "senior Whitehall insider" had confirmed that the proposals were "under active consideration".

The Department for Constitutional Affairs highlighted that the 725,000 people affected already vote in local and European elections.

The government would have to decide whether to base a referendum on this model or on that used in general elections - where such citizens are excluded.

An official in the department stressed that no decision has yet been taken, but the Conservatives interpreted this as a sign of desperation among ministers.

"This is a measure of how desperate the government has become in its attempts to cajole the public into the euro," said shadow chancellor Michael Howard.

The legislation will also include the wording of the question put in the referendum.

It is expected to be unveiled in a draft bill to be brought forward in this autumn's Queen's Speech.