The obstacles to euro entry are not nearly as great as they're made out

Most of Britain's authoritative figures want to join the euro, including those like John Major who were initially sceptical

Supporters of the euro are gloomy. In the next week or so Tony Blair and Gordon Brown will declare that their economic tests for membership of the single currency have not been met. They have taken another tense walk to the bottom of the mountain and decided it is too risky to climb, hoping the weather might be better another day.

For years now the euro has seemed impossibly daunting in Britain. It tore apart the last Conservative government, making life hell for John Major and straining his otherwise good relationship with his Chancellor, Ken Clarke. It brought out the worst in the early months of the New Labour government with briefings being conducted from the Red Lion pub in Westminster informing journalists that the euro was being kicked into the long grass.

Now it is the subject of highly tense and ongoing exchanges between Mr Blair and Mr Brown over the precise wording of their verdict on the five tests and even over which of them is to make the pivotal statement in the Commons. Two former cabinet ministers, Peter Mandelson and Robin Cook, dare to make the case for the euro. Their immediate punishment, especially in the case of Mr Mandelson, is to be bashed around by The Sun newspaper. It all looks impossibly bleak again.

Yet mountains can sometimes look more dangerous than they really are. There are times, I am told, when climbers attempt an ascent and discover that the experience is not as bad as they feared. To their surprise they quite enjoy themselves. In retrospect they agree that the worst bit was contemplating the climb, the tense sweaty reflections on whether they dared go for it in the first place.

This is the case with Mount Euro. The reality of the situation is nowhere near as intimidating as it seems. Take a step back and consider the terrain. The current tensions between Mr Blair and Mr Brown relate to whether the euro should be ruled out for the rest of this parliament. Without a doubt their exchanges are highly charged. They have implications for the tone of the entire statement that accompanies the "not yet" verdict.

In my view Mr Blair is right to insist on keeping open the possibility of a referendum next year. There are risks in such a strategy: for the next 12 months the media will have a field day speculating on the situation in ways that could be politically and economically destabilising. But ruling out entry for another term would kill off any limited momentum being built up behind the euro. So their tortuous discussions matter, but they do not matter that much. More important is that Mr Blair and Mr Brown both believe that Britain should join the euro. Mr Brown is not a euro-sceptic and knows that it is in Britain's interests to join fairly soon. He would prefer to address the issue in the third term. Mr Blair wants to keep the option open for now.

This is a very different situation from the tensions during the Thatcher years when her Chancellor and Foreign Secretary tried to persuade her to join the ERM. She was firmly opposed to the whole idea, only pretending to wish to join when "the time was right" (which meant that she joined when the time was wrong).

Most of Britain's authoritative and popular political figures want to join the euro. The cabinet is more or less united, with some of the livelier members – Peter Hain, Patricia Hewitt and Charles Clarke – being especially enthusiastic. The others will follow the lead of Tony Blair as they did in the war. The increasingly popular Liberal Democrats are in favour. The consistently popular Mayor of London, Ken Livingstone, is a keen advocate. The charismatic figures in the Conservative party – Ken Clarke, Michael Heseltine – are enthusiasts. Equally important others who were initially sceptical – John Major, Malcolm Rifkind – believe that entry is desirable and inevitable at some point, placing them miles away from the "Never" position of Iain Duncan Smith.

Leading the anti-euro case are those Conservatives that became big names when they lost elections by a landslide. In a referendum campaign Iain Duncan Smith would be the most prominent contemporary Conservative politician to lead the "No" campaign. Come to think of it, he would be the most prominent politician from any party putting the anti-euro case. This would be more of a one-sided political contest than the original referendum on Britain's continued membership of the Common Market in 1975.

There are, of course, the newspapers, but even they are not as powerful as they seem. The Sun cannot win a political campaign without political leaders to amplify its case. Rupert Murdoch's tabloid helped Margaret Thatcher to win elections and played a major role in John Major's victory in 1992. But without formidable political allies on the campaign trail, The Sun will be less credible, especially as it has spent the last few months hailing the leadership of Tony Blair.

The economic conditions are also moving fast in the euro's direction. This was not the case in the autumn of 1997 when the British economy, especially interest rates, was wildly out of step with the Eurozone. Those of us who criticised Mr Blair and Mr Brown for their "No" decision then were wrong. A particular and justified worry in the Treasury at the time was that a rapid fall in interest rates would fuel the uniquely British housing boom. Now house prices in parts of the country are falling and the rest of the economy looks more fragile.

Higher unemployment in Germany and France is little to do with their membership of the euro and much more to do with the inflexibility of their labour markets. This was one of the reasons why Mr Brown, in an under-reported speech last month, stressed the importance of more flexible labour markets in Britain, partly to prepare for joining the euro.

Accompanying the greater economic convergence is a palpable change in the attitude of business leaders. Some of them are crying out more loudly for entry now. I detect a shift similar to the one that took place over the "tax and spend" debate that dominated the early years of New Labour. At first neither Mr Blair nor Mr Brown dared to make the case for higher spending. Within two years of the first term voters were screaming for higher investment in schools and hospitals, wrong- footing the Conservatives who had assumed that their plans for cuts in taxes and spending would be popular.

Think of the opening day of a euro referendum campaign. At the "Yes" press conference would be Tony Blair, Gordon Brown, other senior cabinet members, Charles Kennedy, Ken Clarke and quite possibly several other senior Tory heavyweights. Over at the 'No' headquarters Mr Duncan Smith would be the star turn with The Sun screaming at the margins.

The euro is more of a molehill than a mountain. Or to put it more precisely, the mountain will become a molehill once the climbers dare to start the ascent.

s.richards@independent.co.uk