JOBS will be lost in the North-East if Britain does not join the euro, Hartlepool MP and former Cabinet minister Peter Mandelson has warned.

In a speech to campaigners seeking early entry to the single currency last night, Mr Mandelson argued it was time for Britain to come off the fence on entering euro zone.

Although he left the Cabinet after the Hinduja passport affair, Mr Mandelson is still close to Tony Blair and is a political soulmate of the Prime Minister.

Labour committed itself to joining the euro if the five economic tests it set itself are met.

While these will be reviewed at the beginning of June, it is believed Chancellor Gordon Brown is increasingly sceptical of the benefits of joining.

Mr Mandelson said: "We will remain excluded from the leadership position our national interest requires until we make up our minds about the singe currency."

He said the North-East had benefited from foreign investment.

"But investment, jobs and economic growth will be put at risk if we continue to remain outside the euro zone."

The MP urged people not to be taken in by the caricature of euro zone countries as a "collection of economic basket cases", because five of them grew faster than the UK last year.

"We will not be forgiven - and I say this about the Government and the party as a whole - if in future years people look back on this period of Britain's relationship with Europe as a moment of painful misjudgement and lost nerve."

He told his audience Britain was winning arguments about the shape of Europe but could be accused of "talking a good game" unless it fully committed itself to the euro.