Joining  the euro would only cost Britain something between £3 billion (€4.75 billion) and £8 billion, less than 1 per cent of gross domestic product, according to a study published yesterday.

The paper, by business consultants Parascosa Consulting and Solving International, said the cost to an average business if Britain adopted the euro would be about 0.75 per cent of turnover.

It said the greatest costs would be borne by retail businesses such as high-street stores and banks, which would have to keep customers informed on the euro and their business plans for conversion.

"Evidence from Ireland, which is the most culturally equivalent source for UK purposes, suggests that a UK national retailing chain or clearing bank could expect to spend in the order of £100 million," the study said.

These types of costs should be allocated in three equal portions in the financial years 2003/4, 2004/5 and 2005/6.

A study in February 2000 for the No campaign, the anti-euro group, estimated that joining the single currency would cost Britain around £35 billion, approximately 4.2 per cent of GDP.

The British government's position is that it is in favour of joining the single currency as long as five economic tests, which it will assess by June 2003, are met, and subject to approval in a referendum.

Pro-single currency groups quickly welcomed the study, which contrasted sharply with a report by the No campaign in February 2000, which estimated that joining would cost Britain around £35 billion or roughly 4.2 per cent of GDP.

"This report shows that the 'No' lobby's claims about the costs of changing to the euro are a massive exaggeration," said Mr Philippe Legrain, Britain's chief economist in Europe.