THE Treasury is on track to complete its assessment of whether Britain should join the European single currency by June and is unlikely to be knocked off course by a possible war in Iraq, the Chancellor of the Exchequer told MPs yesterday.

But Gordon Brown did not rule out repeating the assessment six months or a year later if the initial judgment was negative.

Anti-euro campaigners accused Mr Brown of fuelling uncertainty in the City, and said the Government's credibility would be at stake if it tried to rerun the tests so soon after they had been failed.

But Mr Brown insisted the Government would not reveal its plans until the results of the tests were announced.

Giving evidence to the House of Commons Treasury committee, he said: "If the assessment is Yes, we will put the matter to Parliament and then to the people in a referendum. If the assessment is No, we will explain the next stage at the time we publish the assessment."

Mr Brown made clear he expected the Cabinet to rubber-stamp the Treasury's decision which ever way it goes.

He said he expected European Commission rules requiring new euro entrants to spend two years in the Exchange Rate Mechanism (ERM) to be waived if the UK applied to join. Britain would refuse to rejoin the ERM.

This would clear the way for the euro to be introduced in Britain in time for the next General Election, expected in 2005.

But Tory committee member David Ruffley said: "We have got a war coming on, failure to deliver on public services, a failing UK economy and a sclerotic and failing euro economy. In those circumstances, no sane Chancellor would want to go into the euro."

George Eustice, director of the No campaign against euro entry, said: "People will rightly see that the only test the Government really cares about is whether they can win or not."

Pro-euro Liberal Democrat committee member Norman Lamb accused the Chancellor of dithering on the euro.