Tony Blair has won his battle with Gordon Brown to keep open the option of holding a referendum on the euro before the next general election, it is reported.
Have Blair and Brown reached a compromise?
And the prime minister is prepared to delay the next polling day until 2006 to maximise his chances of leading the country in the single currency, the Sunday Telegraph adds.
In return, Mr Brown will retain control of the government's five economic tests on whether the country is ready for membership, the paper says.
A crucial announcement on the euro is due on 9 June, when Mr Brown is expected to say the tests for membership have not yet been met.
It had been suggested that he wanted to rule out a fresh assessment before Labour attempted to win a historic third term.
The option of postponing the next election could give Mr Blair extra time to persuade the British people that the time is right to enter the euro, the Sunday Telegraph says.
It quotes one Cabinet minister as saying: "Everyone has been assuming that the next election will come in the spring of 2005, but Tony could put that back to
the autumn of 2005 or wait until 2006.
"The key thing that has emerged from the consultation with the Cabinet last week is that it has unlocked a clear consensus in favour of keeping open the
option of a referendum before the election."
The announcement on the euro has been widely reported as a source of great tension between Mr Blair and Mr Brown.
The Sunday Telegraph says the men have reached a compromise, although tensions remain over the referendum.
"One worry we had was that Gordon wanted to rule it out this Parliament so that he could take us into the euro himself when he become prime minister. Tony isn't having that," it quoted one pro-euro minister as saying.
Meanwhile, the Observer says the Treasury's analysis of Britain's readiness for entry to the euro is unexpectedly good.
It says the economy is more convergent with the European average than some existing eurozone states.