Britain will not join or prepare to join Europe's single currency under its new coalition government, according to a joint policy agreement published on Wednesday.
"We agree that Britain will not join or prepare to join the euro in this parliament," said an agreement between the Conservatives and the Liberal Democrats, who have formed a coalition government.
The parliament is expected to last five years.
Differences between the centre-right Conservatives and centrist Liberal Democrats on Europe in the campaign for last week's general election were pronounced.
Conservative leader David Cameron, the new prime minister, was strongly opposed to the EU's Lisbon Treaty and his party campaigned on a platform of changing the law so Britain cannot join the euro without a referendum.
The Conservatives have a strong eurosceptic tradition and has broken away from the main centre-right grouping in the European Parliament to form an anti-federalist alliance with fringe parties.
The Lib Dems said in their manifesto they were in favour of joining the euro but only after a referendum when the economic conditions are favourable.
Lib Dem leader Nick Clegg, now deputy premier, is a former European lawmaker who has spoken of the need for Britain to boost its relationship with Europe and reconsider its "slavish" relationship with the US.