European Union leaders were bracing themselves for a tough three-year sales campaign to win public support for the planned single currency, to be called the Euro.

On the opening day of the Madrid summit, EU heads of government brushed aside doubts about monetary union, agreeing unanimously on the name of the new currency and reaffirming January 1 1999 as the launch date.

In spite of a general lack of enthusiasm for the name, Mr Jacques Santer, president of the European Commission, said the EU was 'irreversibly' on track toward a single currency which would be good for jobs and Europe's economies.

Still unresolved, however, is the sensitive question of the relationship between the 'inner core' of single currency countries and those which either fail to qualify as members or which wish to remain outside.

Mr John Major, the UK prime minister, won a sympathetic hearing when he warned that Emu could create a 'privileged elite' inside the EU which could fracture the single market and increase political divisions.

Responding to Mr Santer, Mr Major said on ITN on Friday: "It's all very well being on an irreversible track but one needs to know where the track is going. . . we need to make sure all the (train) carriages are coupled."

The agreement on the Emu timetable is the centrepiece of the two-day Madrid summit, which will also focus on enlargement and reform of EU institutions.

The deal resolves three outstanding issues relating to the phased introduction of the single currency between 1999 and 2002: EU leaders will decide which countries participate in Emu "as soon as possible in 1998" on the basis of the actual performance of economies in 1997 rather than forecasts. The timing of the planned EU summit falls after the next UK general election, and means the UK presidency will chair the meeting.

Governments in the monetary union will be asked to issue tradeable debt in Euros once exchange rates are fixed and a single monetary policy is in operation in 1999. The Spanish presidency said this would create a 'critical mass' for the new currency, well before the issue of Euro -notes and coins in 2002.

In deference to Germany, non-tradeable debt may be denominated in existing national currencies during the transition. Commercial banks will have the option of taking deposits and opening current accounts in Euros ahead of 2002.

The name Euro will stand in its own right, rather than Germany's favoured idea of using it as a prefix for existing currencies, such as the Euro-mark.

On enlargement, it was agreed membership bids from former communist countries should be treated on their merits instead of setting a single date for starting negotiations as a bloc. The Commission would report on the fitness of the countries for membership around mid-1997.

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