David Cameron has told European leaders to focus on economic growth as they met in Brussels to push for greater financial integration.

"This is where we need to get really serious about the growth agenda in Europe," the prime minister said as he arrived at the EU leaders' summit on Monday.

He said the EU needed to focus on signing trade deals with emerging economies in the far east as well as reducing regulation on small businesses.

The 17 eurozone leaders are expected to agree a deal on a new "fiscal compact" designed to force national governments to keep balanced budgets by imposing mandating budgetary discipline.

Britain decided to opt out of the mechanism when it vetoed a EU-wide treaty change in December. But the Reuters news agency quoted one British official in Brussels ahead of the summit who questioned the wisdom of the move.

"To write into law a Germanic view of how one should run an economy and that essentially makes Keynesianism illegal is not something we would do," they said.

Britain had initially expressed concerns at the possibility of EU institutions such as the European Court of Justice being used to enforce the new rules, but the government is believed to have no dropped those objections.

That decision has upset several Tory eurosceptics, including Stewart Jackson MP who told PoliticsHome: "Conservative backbenchers will not accept a new treaty by the back door without a Commons vote or a referendum in order to prop up the failed eurozone."

In the wake of the UK's veto in December, the British government had suggested it would be unhappy at EU-wide institutions being used by the 17-eurozone states to police a treaty that did not apply to all 25 members.

Over the weekend the Financial Times reported that Angela Merkel had floated the idea of parachuting an EU commissioner into Athens to take control of Greek tax and spending decisions.

Germany's vice chancellor, Philipp Rösler, told the Bild magazine: "If the Greeks cannot do this themselves, then the leadership and oversight must come increasingly from outside the country, for example from the EU."

The suggestion was greeted with anger by the Greek government as well as Tory eurosceptics in London.

Work and pensions secretary Iain Duncan Smith told the BBC on Sunday that the EU needed to be "very careful" about how it dealt with sovereign states.

"I know the prime minister has said this to them, and I think as one of the great historical democratic nations, we should always stand up for democratic freedoms all over Europe," he said.

French president Nicolas Sarkozy raised the stakes in Europe-wide discussions over a "Robin Hood" tax on financial transactions ahead of the meeting saying that he may unilaterally impose a levy.

Sarkozy also used a TV broadcast to take a swipe at the British government when he said he wanted France to remain a "land of production” unlike the UK which had "no industry" left.