08/12/2011 12:52 GMT | Updated 09/12/2011 00:30 GMT

Eurozone Crisis: Cameron Faces Pressure As Fiscal Union Looms

David Cameron is facing increasing pressure from his own backbenchers as he heads to a make-or-break European summit in Brussels.

Downing Street insisted on Thursday morning that the prime minister was "focused on securing the best deal for Britain" at the summit, which concludes on Friday. But by the afternoon he was compared to Neville Chamberlain by eurosceptic backbench MP Edward Leigh.

Nicolas Sarkozy and Angela Merkel are expected to call for measures prohibiting eurozone countries from accruing too much debt, and a eurozone rulebook to encourage greater fiscal integration.

Their plans come as European Commissioner Jose Manuel Barroso urged European leaders to "do everything" to save the euro, saying: "The world awaits not more national problems but European solutions."

Cameron faces a challenge from his own European counterparts, with German chancellor Merkel suggesting she will reject his demands to protect Britain's interests, saying the key is saving the eurozone.

But backbench Conservatives have also urged the government to use the summit as an opportunity to repatriate powers back from the European Union.

Former leadership candidate David Davis said on Thursday morning: "The raw politics of this is that if there is a significant change in the balance of power in Europe - that's the test. If there's a significant change in the balance of power, it has big implications for our future, that's the point at which you have to have a referendum."

And top Tories including Cabinet minister Owen Paterson and Mayor of London Boris Johnson said a referendum on the UK's position in Europe would be inevitable if this week's meeting led to treaty changes.

Despite this Cameron has promised to bring the "British bulldog" spirit to Brussels. Speaking ahead of his trip, he said Britain needed the european market but acknowledged "the euro, the single currency, isn't working properly".

"That's having a terrible effect on those countries, but it's also having a big impact on us, and we need those eurozone countries to come together, to make changes, to sort out their problems, and to get the institutions of the eurozone behind that currency, so they get their economies moving again, and that'll be good for us", he said on Thursday morning.

Chancellor George Osborne has also vowed to protect the interests of states that were not in the eurozone, to avoid a two-tier Europe.

"You’re right to point to the risk of caucusing," he told the Lords on Thursday.

"There was a concern about caucusing when the euro was created. If anything there probably hasn’t been enough coordination in the euro zone. That’s why we’re seeking protections for the 27 members of the EU," he said.

On Wednesday evening, Standard and Poor's put the EU's AAA credit rating on negative watch.

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