Europe Minister David Lidington has revealed the “unprecedented [and] severe reservations” held by the UK during last year’s talks to solve the Eurozone crisis.

Speaking to the European Scrutiny Committee, he said there were a “number of specific measures that we felt were threatening the integrity of the single market”.

David Cameron's veto of a new EU fiscal treaty at the start of December has come under fire for achieving very little to protect the interests of the City of London, with Labour accusing the PM of grandstanding to appease eurosceptic Tory MPs.

Pressed by MPs, Lidington outlined the four safeguards sought by the British government.

• The “principle of non discrimination on grounds of currency” being included in the treaty
• Written assurances on the transfer of supervisory powers
• “Comparable” arrangements on financial levies
• Individual members could have “domestic stability regimes” that went further than EU minimum standards.

Lidington explained that the government was worried that other countries were going too slowly on banking reform. He told MPs:

“The fourth point [on domestic stability regimes] sprang from our concern that what we had been seeing was a watering down of the Basel III commitments on banking ratios, which at the time had been agreed would be applied internationally.”

The minister said that he felt the safeguards were “perfectly reasonable”.

Bill Cash, chair of the European Scrutiny Committee, was surprised that the government “had severe and unprecedented reservations” in dealing with its European neighbours.

Lidington dismissed reports that the Prime Minister sought to exempt the City of London from a financial transaction tax - “we did not seek a UK specific opt-out”. He was keen to underline that “the treaty contains nothing within it that can bind the UK as it is not party to it”.

The minister was optimistic about the recent EU treaty, saying: “We support as a government the intended objectives of this treaty. We don’t want to stop our friends and neighbours in the Euro-zone from taking the action they need to restore stability.”

However he sounded a note of caution, observing that the treaty has not been ratified by all the signatories –
“[The treaty’s success] relies on the continuing mutual commitment of its signatories to deliver on what it promises”