David Cameron has warned European leaders that Conservative MPs could sabotage the creation of the eurozone bail-out fund if he does not get concessions in a new European Union treaty.
The Prime Minister faced hostility at EU talks in Brussels, where France was accused of trying to “poison” other countries against Britain over Mr Cameron’s demand to safeguard the City of London against financial regulation.
Mr Cameron is under intense pressure from Tory backbenchers and ministers to use talks on the EU treaty to repatriate British power from Brussels. MPs say that at the very least he must deliver a clear legal protection for the City.
One Tory MP said that a failure to secure “cast-iron” guarantees would see Mr Cameron return home like Neville Chamberlain after the Munich Agreement.
Downing Street called the remarks “ridiculous”, but in Brussels, the Prime Minister tried to use the Tory pressure as a bargaining chip. He told leaders including Angela Merkel, the German chancellor, that without significant concessions Tory MPs could try to block British ratification of the European Stability Mechanism, created to bail out indebted euro members.
Britain does not contribute to the fund, but as an EU member is still required to ratify the changes to treaties that allowed its creation.
