By Mark Davies BBC News Online political reporter

Gordon Brown's leading adviser is to give a speech on the government's five tests for joining the euro - with every sentence set to be scrutinised for hints about the chancellor's position on the currency.

The speech by Ed Balls, chief economic adviser at the Treasury, on Wednesday comes amid renewed speculation about the UK's position on the euro, with few developments on the currency allowed to pass without being seen as significant to the debate.

It is first of all about the economics, but then it is about taking a political view Lord Haskins

Tony Blair and Mr Brown are said to be barely on speaking terms, with the breakdown in relations blamed to a large degree on stark differences of opinion over the euro.

Downing Street has dismissed reports of a hardening of the Treasury's stance on the euro - based on papers published alongside Mr Brown's pre-Budget report - saying the analysis centred on the economies of developing countries.

But alleged comments by the chancellor, in which he is said to have trashed policy proposals from the prime minister, have left many at Westminster certain that the two are deeply divided on the euro.

Meanwhile, an office move by the pro-euro Britain in Europe group has been reported as either a beefing up exercise ahead of a referendum or a downgrading of the campaign - it all depends on who you ask.

Mr Balls' speech, organised by the Institute of Contemporary British History, is described as an academic lecture, putting the decision on the UK's five tests in an historical context.

Verdict

But it will be closely watched by all sides in the euro debate for hints of the Treasury's position.

The Treasury says no substantial work has yet been done on assessing the five tests. It says only "preliminary and technical" work has started ahead of the June 2003 deadline for a verdict on the tests.

Speculation about the UK and the euro blew up again this week over the Treasury paper which accompanied the chancellor's pre-Budget report.

The report was interpreted as revealing grave doubts about fixed exchange rates, the inflexibility of rules for joining the single currency and European Central Bank inflation targets.

But Downing Street said the document related to the economies of developing countries.

Concerns

It was described by Lord Haskins, a Tony Blair aide and member of Britain in Europe, as an academic document. The government's timetable for assessing the five tests was clear, he said.

It is increasingly clear that if that decision is taken in the national economic interest, then the conclusion can only be positive Simon Buckby Britain in Europe

But Sir Martin Jacomb, a prominent member of the anti-euro campaign and former chairman of the Prudential, said it highlighted the Treasury's concerns about exchange rate regimes.

Asked on BBC Radio 4's Today programme about the alleged split between the prime minister and his chancellor, Lord Haskins said he was sure there were "differences between lots of people about this matter".

And he admitted that a decision on joining the euro was ultimately political.

"It is first of all about the economics, but then it is about taking a political view," he said.

"And the political view has to be that saying no creates huge political problems for the government because it probably leads to currency volatility, reduces the credibility of the EU and reduces credibility to the international investor."

Confidence

Britain in Europe has now moved its office from a complex near Buckingham Palace to new premises in north London.

Campaign director Simon Buckby said the move reflected "our confidence that a referendum will take place in the year ahead and so we are actively preparing to become the 'yes' campaign next year".

He said it was part of a process of building the 'yes' campaign rather than launching it.

"Of course, a referendum will only be called if the government assess the five economic tests positively," he said.

"We believe the government will take the right decision for the country.

"It is increasingly clear that if that decision is taken in the national economic interest, then the conclusion can only be positive."