THE euro will be in use in the North-East by early next year, two senior European politicians predicted yesterday on a visit to the region.

Lode Willems, the Belgian ambassador, and Geoffrey Martin, the head of the European Commission's UK offices, were speaking at a conference at Newcastle University which looked at how the North-East can participate more in European affairs.

"The euro will come to the North-East by competition between retailers and hotels," said Mr Willems, whose country currently holds the presidency of the European Union. He predicted that hotels and then shops in the region would allow continental businessmen and tourists to pay for goods in euros by February.

The single currency is being introduced to mainland Europe on January 1.

"There will be hiccups and queues and maybe confusion," said Mr Willems. "For eurosceptics, it will be very easy to find a bad story in any city in any of the 12 countries, but that will be a cheap story because this is a technological, economic and also mental transition. The hiccups will be compensated for by Europeans having this great symbol of unity in their pockets."

Mr Willems was also keen to see how the North-East was moving towards regional government. Belgium is a federal country and during its six-month presidency is trying to increase the voice of all regions within Europe.

"It is about reconnecting the citizen with the EU," he said. "In Belgium we have decided that the regional level is the best level for most decision-making, as have other federal states, like Germany.

"It would then be possible for the North-East to have far more clout in Europe than it does now."