While the UK is still wrangling over whether or not to join the euro, the European Central Bank is busy working on a way to make the currency even more secure.

The ECB is in talks with Hitachi about embedding radio tags in euro banknotes, according to a Japanese news agency. It is looking at the possibility of inserting the world's smallest integrated circuit, developed by Hitachi, into notes to prevent counterfeiting of euros.

While the ECB is always researching different technologies to see which will be useful for banknotes, it cannot talk about that work, a spokesman for the bank said last week. He would not comment on the Japanese report, saying that all research and development work for the ECB is under non-disclosure agreements.

Hitachi is developing non-contact chips for use in banknotes and other paper documents, Kantaro Tanii, the company's corporate communications manager for Europe said today, although he would not comment on specific partnerships.