The British Chancellor of the Exchequer, Mr Gordon Brown, has dropped a broad hint that the Labour government would seek to join Europe's single currency, saying Britain's economy should be ready for entry within a few years.

"With our programme of economic reforms and business preparations, it is realistic to think that the economy could be in a position to allow the UK to join the single currency early in the next parliament," Mr Brown wrote in a letter to Mr Giles Radice, chairman of parliament's Treasury Committee.

"This is a sensible and practical framework within which to plan. It is a framework which provides stability for both business and the financial markets."

Mr Brown was responding to a report by the committee that had asked for further details of government policy toward the single

currency, which 11 of the European Union's 15 members will launch on January 1. A relatively early entry by sterling into the euro would be welcomed by Ireland, as it would remove a potential source of instability for the economy.

Mr Brown said last October that, barring exceptional circumstances, the government will not hold its promised referendum on whether Britain should ditch sterling in the current parliament, which could last until mid-2002.

But he told Mr Radice in the open letter that reforms he had introduced would make it easier to meet the five key economic tests he has laid down for Britain's entry.