Coalition rift widens as Tories rejoice

Lib Dems, meanwhile, lament a 'black day' consigning Britain to the EU's 'waiting room'

Nick Clegg faces a difficult task to placate a party angered by the Prime Minister's performance at the summit in Brussels (Reuters)

Conservative MPs yesterday reacted with delight to David Cameron's decision to veto plans for an EU-wide treaty change – believing it will eventually force Britain to split further from eurozone countries.

Prominent eurosceptics believe the move by the eurozone countries to go outside the legal framework of the EU and to set up a core fiscal union will eventually undermine the existing union.

The Eurosceptic Tory MP Bill Cash said: "We are now embarked on a very serious path towards renegotiating in a fundamental way our treaty relationship with the European Union.

"The Germans and the French precipitated this with their demands. Now, David Cameron quite rightly has said 'No'. There is a real question, however, about the way in which we go forward from here."

Bernard Jenkin added Britain would need to look again at the status of the EU. "This is a very big change to the European Union," he said. "This is the moment when we have to start completely renegotiating our relationship. We are going to be a satellite on the edge of what is going to be an economic superpower. We cannot remain in the treaties as currently constructed."

David Davis did not rule out exiting the EU altogether. "We are seeing a new balance of power in Europe arising out of the eurozone crisis," he said.

"What [Mr Cameron] should be doing is looking for a new relationship with Europe which recognises those power balances but also protects our interests both inside Europe and in terms of trading with our friends abroad." Asked if that meant pulling out of the EU altogether, he said: "It might happen."

But Mr Cameron's decision effectively to exclude Britain from negotiations on a new treaty caused consternation amongst pro-Europeans. The Liberal Democrat peer Lord Oakeshott of Seagrove Bay accused Mr Cameron of undermining Britain's influence in Europe and putting the interests of the City above the wider economy. "It is a black day for Britain and Europe. We are now in the waiting room while critical decisions are being taken," he said.

"With western economies and our banking system on the edge of a cliff, we should not be putting special pleading for interests in the City of London above our vital national interest of working closely together with Germany and France to keep our economy and jobs all over Britain safe."

The Liberal Democrat MEP Chris Davies accused Mr Cameron of "betraying Britain". "Far from keeping Britain strong, Cameron has ensured that we will lose our influence at the top table," said Mr Davies.

Denis MacShane, the Labour MP for Rotherham, said: "There is now little point in Britain staying in the EU. Bill Cash has won and I congratulate him and other Eurosceptics on their victory.

"Europe's future will be settled without us. The 17 plus 6 will decide new rules which will govern trade and Britain will have to comply, like Norway or Switzerland, or give up market access."

True Blue: Tory Eurosceptics

Bill Cash

One of the arch Tory Eurosceptics, he suggested Mr Cameron was now embarking on a "very serious, responsible path towards renegotiating our relationship with the European Union". That may be more wishful thinking than dispassionate analysis.

David Davis

Both a Eurosceptic and Camo-sceptic, Mr Davis urged Mr Cameron to be "equally robust" as Margaret Thatcher in seeking to recast European relations. He may suspect that, in the end, the PM won't be.

George Eustice

A more moderate Eurosceptic, Mr Eustice has been vehement that Britain must protect its financial-services sector in the face of closer eurozone co-operation. He will be genuinely pleased with Mr Cameron's position.

Iain Duncan Smith

The Work and Pensions Secretary, one of the biggest Eurosceptics in the Cabinet, will be pleased by the British approach. At one stage he was said to have even considered resigning over the Government's apparent unwillingness to stand up to further European integration.

Owen Paterson

Northern Ireland Secretary daid that if a new eurozone bloc was created, "there will have to be" a referendum on British membership. The decision in Brussels effectively creates one – but it is hard to see Mr Cameron agreeing with him.