David Cameron has been accused of "blackmail" after he warned that Britain could leave the EU if a federalist becomes the next president of its executive arm. The Prime Minister is said to have delivered the message in a private meeting with German Chancellor Angela Merkel at a summit last week.
According to Der Spiegel magazine, Cameron said the appointment of continuity candidate Jean-Claude Juncker could destabilise the UK government and force an in-out referendum to be held earlier than 2017. "A figure from the 80s cannot resolve the problems of the next five years," he reportedly warned.
Downing Street declined to comment on the contents of the "private conversation", but Cameron has made clear his bitter opposition to Juncker's appointment. The apparent upping of the stakes drew a sharp response from the former Luxembourg prime minister, who expressed confidence that he would secure the post this summer with support from Merkel and the European People's Party (EPP) bloc that still dominates the European parliament. "Europe must not allow itself to be blackmailed," Juncker told Germany's Bild am Sonntag newspaper.
The row heaps further pressure on Cameron in the wake of a mauling from UKip at the local and European elections, and with just days to go until a crucial by-election in Newark. Polls have suggested Nigel Farage's party is close to overhauling the 16,000 majority the seat's disgraced former MP Patrick Mercer won in 2010 - potentially dealing a hammer blow to the Tories.
Cameron has ordered his ministers to visit the constituency at least three times during the campaign - and is expected to make a fourth trip himself. In a sign of Conservative nerves over the growing threat from Ukip, Iain Duncan Smith has attacked the BBC for failing to give due prominence to Cameron's pledge to hold an in-out referendum on EU membership by 2017.
He also stressed that the PM knew he had to negotiate "significant return of powers" in order for Tory colleagues to vote to stay in the union. Duncan Smith told the Sunday Telegraph he wanted to limit migration from the EU, arguing that Brussels should be stripped of control over who is entitled to state benefits in Britain.
Meanwhile, Chancellor George Osborne has blamed European rules for the Government's failure to control immigration, conceding for the first time that Mr Cameron's target of bringing net migration levels below 100,000 by next May will not be met. Official figures showed the number coming to the UK for at least a year, minus the numbers leaving, rose 58,000 to 212,000 in the year to September 2013.
Cameron is opposed to federalist Junker's appointment
Cameron has rejected calls to drop the target, arguing it is still "achievable" but refusing to offer a "cast iron guarantee". But Mr Osborne told the Sun on Sunday that the goal could not be achieved until the terms of Britain's EU membership have been changed. "We have got our policy, we are delivering on the policy, and the key dimension to it which we need to now deliver on is the European aspect," he said.
"That requires renegotiation of our membership of the EU, an in-out referendum so the British people have their say." Defence minister Anna Soubry also admitted it "does not look like" the net immigration target will be achieved. But she risked provoking a backlash by saying some of the concerns she heard about immigration were "frankly racist".
"When you make the case with people who come and see me in my constituency surgery who say I'm really worried about immigration. You say really, why? This is Broxtowe. We don't have a problem with immigrants," she told the BBC's Andrew Marr show. "When you explain all that to them they get it. Not all of it. Some people have prejudices, some people are frankly racist, but there are many who just don't know the argument."
Former Liberal Democrat leader Lord Ashdown added to Tory woes by signalling their coalition partner was likely to block proposals for tightening immigration rules - thought to include restrictions on employing cheaper foreign workers and provision to deport unemployed Europeans after six months. "It is unlikely that we will let those go through. But let's have a look," Lord Ashdown said. "Immigration is intensely valuable to Britain... we have benefited hugely from immigration in this country."
Ed Miliband was also facing calls from Labour MPs to take a tougher line on immigration, with a group including former minister Frank Field and prominent backbencher John Mann writing to the Observer urging tighter restrictions for new EU states. As the Tories and Labour struggled to devise a strategy for countering Ukip's challenge, Farage made a bold bid to broaden his party's appeal.
He signalled that its election manifest will include promises to make earnings up to the minimum wage exempt from tax, and cut the top rate levy from 45% to 40%. Farage also said he wanted to see a grammar school "in every town", and a "chainsaw" taken to middle-management in the NHS.