The head of one of the world's biggest car companies reignited the debate over the single currency yesterday with a warning for the government that its £1.5bn investment in the UK would be at risk if Britain stayed out of the euro.

Executives of Japan's biggest car manufacturer, Toyota, which employs thousands of workers at plants in Derbyshire and Clywd, said they could no longer sit on the fence as Britain decides whether or not to enter Emu.

"Waiting for a decision is really hurting us and it is time to state very clearly to the British public that we want Britain to join the single currency," said Shoichiro Toyoda, honorary chairman and former chief executive officer of Toyota.

The comments are sure to increase the pressure on the government and come days after the trade and industry secretary, Stephen Byers, admitted that big business was telling ministers that they must make a decision on the euro early in the next parliament.

Toyota's broadside echoes earlier calls by senior figures from industry to sign up to the single currency. The chairman of Rover Group, Prof W Samann, told reporters recently that full membership of the euro would "consolidate BMW's investment" in Britain.

Naoyuki Akikusa, the president of Fujitsu, went further last year. "If the UK were to join in 2002, that would be OK. But if 2020 - that would pose a big problem."

Toyota managers said yesterday that its UK operations, including a new £200m plant at Burnaston, Derbyshire, would be at risk if the strong pound continued to push its British operations deep into the red. The company said its British operation had suffered its worst performance ever last year as a result of the sharp strengthening of sterling against the euro. This currency fluctuation hurts the competitiveness of the 200,000 Toyota cars produced each year in the UK, 70% of which are sold elsewhere in Europe.

"The figures are not yet available, but we posted a very significant loss in the UK last year," said Shinro Iwatsuki, di rector in charge of European operations. "I would imagine that Ford, Vauxhall and Rover are in a similar position."

He said Toyota sent a senior delegation to Mr Byers last month to express its concerns.

"We told him that if the present situation continues, then at the very least it will be impossible to expand our operations in the UK. If there is no change in the long term, then we will have to decide whether even our existing operations should continue."

The comments, which represent the clearest indication yet of Japanese frustration with Britain's prevarication on the euro, will send shudders through manufacturing industry. Trade union figures show that more than 1m jobs could be lost unless the government signs up for the single currency within 30 months.

Since its opening in 1992, Toyota's Burnaston factory has expanded rapidly and its output almost doubled last year to 200,000 cars. The Deeside plant in Clywd is one of the world's largest engine plants. Together, they have created 3,300 jobs directly, as well as four times that amount among suppliers, in two of Britain's employment blackspots.

Even if Toyota decides only to freeze its current scale of operations, it would be a setback for Britain. Any hesitancy it expresses about the UK is bound to trigger doubts among other Japanese investors.