BUSINESS leaders in the North-west have warned the government that adopting the euro would lead to extra costs for businesses -- and force up prices.

Mr David Briggs, Chairman of Business for Sterling North West, said: "Leading retail organisations have estimated that joining the euro would cost businesses up to 2.5 per cent of their turnover and it is the smaller, local retailers who would be hardest hit."

His reaction followed a new report by the Trade and Industry Select Committee which concluded that preparing for the euro would cost "billions, not millions."

The committee also criticised the Government for refusing to discuss the issue with business.

Mr Briggs, who heads a £16 million-a-year turnover retail operation, said: "Banks are expecting the euro to increase their operating costs dramatically due to the cost of staff training and changing cash machines.

"It is the customer who pays for these extra costs."

The report also warned that the new euro coins would be more prone to fraud because the specifications for them were different between European Mints.

It predicted a 'potential disaster' because computer files could be corrupted when switching to the new currency.

"Why should businesses be expected to waste money preparing for the euro when we have not even decided to join and when more than two thirds of the public are against it," Mr Briggs asked.

Business for Sterling North West is part of the "no" campaign against the euro which was launched in September.

The campaign has just completed a direct mailing to every business in the North-west and a national advertising and information campaign.