The government came under renewed pressure yesterday when Ford's chief operating officer Nick Scheele warned that the world's second largest car group could be forced to stop investing in Britain if the introduction of the single currency is delayed much longer.

He said Ford had invested heavily in Britain, particularly in its premier automotive business, which includes Jaguar and Land Rover, on the assumption that the UK would join the euro in 2004 and at a rate equivalent to DM2.60-DM2.75.

"If we don't fix this you are going to see future investment decisions taking account of a different paradigm," he said at the Birmingham motor show.

Ford's British operations, including loss-making Jaguar, export 80% of output but Mr Scheele said rivals in the euro-zone enjoyed a substantial cost advantage because of the single currency's 25% devaluation since launch.

He won backing from Kevin Howe, chief executive of MG Rover, who said his group's sales in Europe were down this year because of the strength of sterling. His comments came after he launched the MS Xpower SV, a sports car capable of more than 200mph and costing at least £65,000.