Nick Clegg warns over future of coalition

The Deputy Prime Minister, who backed Cameron’s decision on Friday to veto a new treaty designed to ease the Eurozone financial crisis, is to tour the TV studios to tell his Tory allies that they can rule out any prospect of renegotiating Britain’s place in Europe.

Coalition tensions rose yesterday as jubilant Eurosceptic Tories stepped up calls for a full pull-out. But their clamour led to a sharp rebuke from Liberal Democrat deputy leader Simon Hughes, who insisted the issue was “not on the table” and told the Tories to “calm down”.

Lib Dem whip Lord Wallace also admitted his party was worried about the Eurosceptics gaining more influence with the government. “Of course we are concerned about that element,” he said.

“If there was a threat to the coalition it comes from the more extreme Eurosceptics who actually want to bust the coalition and to take Britain out of Europe. That is very clearly against Britain’s national interest and we all have to resist it.”

Clegg’s move comes after Cameron returned to a “hero’s welcome” from Eurosceptic MPs on Friday after vetoing a new 27-member agreement to strengthen financial rules throughout the community. Cameron’s use of the veto, after he failed to win safeguards for the City, prompted the formation of a new “Euro-plus” group of the 26 other EU nations which will now sit apart from Britain on key issues affecting the Eurozone.

It emerged last night that pro-Europe Clegg was privately furious with the Prime Minister after Friday’s decision.

Despite publicly backing Cameron, senior Lib Dem sources said Clegg felt the Prime Minister’s actions were not in Britain's best interests and left the country isolated.

The source said Clegg believed the outcome of Thursday night's negotiations at the European Council in Brussels had been “a spectacular failure to deliver in the country's interest. Nick certainly doesn't think this is a good deal for Britain, for British jobs or British growth. Nick's fear is that we become the lonely man of Europe."

Senior Liberal Democrats said Clegg would today “lay down a marker”, suggesting that Tory backbenchers rein in all talk of further repatriation of powers or moves to have a referendum on EU membership.

Hughes said the Tories should forget all attempts to “pull us further away from Europe. This is a coalition government committed to being constructive about Europe and committed to only negotiating treaties if there is a proposal to transfer powers from Britain to Europe,” he said.

“There is no such proposal, there won’t be such a proposal, there won’t be a negotiation of treaties.”

Former Lib Dem leader Menzies Campbell said: “Now that the dust has settled, the Prime Minister will have to make sure that the congratulations of the Eurosceptics do not turn his head.

“Britain’s economic stability and progress depend, among other things, on the stability of the Eurozone and access to the single market. The Eurosceptics on the Conservative side would sacrifice these two necessities for the sake of a referendum.”

But the strength of feeling on the Conservative side could spell fresh trouble for Cameron, as he returns to face his party this week. Many within the party insist that Friday night was just a start.

Senior backbencher John Redwood declared: “The Euro countries want to press on to a be in a country called the EU. The UK has always said it wants to be in a common or single market. It’s fast approaching the time to sort out this huge difference.”

Tory MP Andrew Rosindell, who attended a dinner hosted by the Prime Minister on Friday night, said: “We can think more freely about where we want to be in the long-term. There are many British people who don’t want to be part of a political union.”

Meanwhile, an intervention from former Tory Cabinet minister Lord Heseltine exposed the potential for a damaging split even within the Tories.

The europhile peer warned anti-EU Tories that Britain could not protect its interests by walking away from the European Union.

Coalition ministers, however, are now watching to see whether the pact formulated by Germany’s Chancellor Angela Merkel and the French President Nicolas Sarkozy, involving all 26 nations, will begin to unravel, once countries outside the 17-member Eurozone take it back to their parliaments for scrutiny.

Senior government figures also believe that, if other countries do rescind their backing, Germany and France may have to backtrack on Britain’s demands to get safeguards protecting the City.

Hughes said: “I don’t think we have seen the final chapter in these negotiations yet at all.”