Image caption Lord Heseltine is an adviser to David Cameron on economic regeneration

Former Deputy Prime Minister Lord Heseltine has said he still expects the UK to eventually join the euro.

The Conservative peer, one of his party's most pro-European figures, said the eurozone had real problems but he hoped it would survive as its collapse would be "catastrophic" for the UK.

All three of the largest Westminster parties have ruled out joining the euro in the foreseeable future.

UK Independence Party leader Nigel Farage said the eurozone was "failing".

Prime Minister David Cameron has faced opposition to his European policies within Conservative ranks, with more than 80 MPs defying the government and calling for a referendum on EU membership.

'Hell of a problem'

Many other backbenchers are calling on the PM to use the current financial instability, and talk of closer integration among countries using the single currency, to renegotiate the UK's relationship.

As one of the party's most staunch pro-European voices, Lord Heseltine has argued that all UK prime ministers have found themselves presiding over a deeper relationship between the UK and Europe.

Being like Norway would be a very good holding position for the UK UKIP leader Nigel Farage

Asked by the BBC's Politics Show if he still felt the UK would ultimately join the single currency, he replied: "I think we will join the euro."

He acknowledged that the eurozone was in crisis but said he believed it would endure, largely due to the determination of Germany and France to preserve its "cohesiveness".

"I think the chances, and it is a balance, are that the euro will survive.

"They (Germany and France) have got a hell of a problem, let's be frank about that, but my guess is that they will find a way through.

"I hope they will because the downside for the British economy of the eurozone going under is catastrophic. People have no idea of the scale of money British banks are owed by European banks."

He said European co-operation since the 1950s had been "remarkably successful".

But UKIP leader Mr Farage said the installation of technocratic governments in Italy and Greece was bad for democracy and meant European institutions were even more remote from the people.

"Those Mediterranean countries need to leave the eurozone," Mr Farage told the same BBC programme. "Those countries are in the wrong currency. The whole thing is failing. It is going to break up."

'German dominance'

Germany had become "totally dominant" in Europe, he claimed, after Chancellor Angela Merkel had "stepped into the breach" left by a vacuum of leadership in Brussels.

He suggested that the UK should model itself on Norway which - by remaining outside of the EU - had control over farming and fisheries policies and was not bound by policies on justice and home affairs.

"Being like Norway would be a very good holding position for the UK," he said.

"It would guarantee us free trade and give us a chance to negotiate a deal, like Switzerland has, where they don't have to have any of the rules."

The PM has said leaving the EU and negotiating trade agreements would leave the UK in the worst of all positions where it would still be bound by many EU rules but unable to influence its decisions.