The ERM started to become problematic for the UK in 1992, as Britain required Europe to lower its interest rates to help prevent the economy from free falling.
However, Germany s Bundesbank refused, prompting the Chancellor, Norman Lamont, to urge Mrs Thatcher s successor to pull out of the mechanism.
However Mr Major, a pro-European, was firmly against severing ties with the bloc, despite several pleas from the Treasury.
This exchange has been documented by the late Jeremy Heywood, who served as the Chancellor s principal private secretary from 1991 to 1997.
The EU set the UK an economic trap with one of its currency mechanisms, it is claimed (Image: Getty)
On June 9, 2003 the Chancellor ruled out Britain s entry into the single currency.
In what he described as one of the most momentous economic decisions our country has to take, Mr Brown said only one of five economic tests on euro membership had been met.
The Chancellor s five economic tests covered the degree of convergence of the UK and eurozone economies, the flexibility to cope with shocks, the effect on UK growth and jobs of euro entry, the effect on financial services and the effect on inward investment.
Tony Blair continued to make plans for UK to adopt the Euro, even after his government ruled it out (Image: Getty)