09/12/2011 12:40 GMT | Updated 09/12/2011 18:18 GMT

Euro Crisis: David Cameron Defends Decision To Veto EU Treaty (LIVEBLOG)

David Cameron has insisted that his decision to block changes to an EU treaty was "the right thing for Britain" and that the UK is not isolated in Europe.

The prime minister said the treaty "didn't have sufficient safeguards for Britain".

"There was a treaty on the table: a treaty that would have meant a lot of loss of sovereignty from countries around Europe, a lot of changes in the European Union, a lot of extra bureaucracy and law-making, and it didn't have sufficient safeguards for Britain, so I wasn't prepared to support it", he told Sky News.

The prime minister said the proposals went beyond his "bottom line".

"I said to people in Britain, if I couldn't get a treaty that was good for Britain, I wouldn't sign up to it, and I was good to my word."

But he denied that Britain would now be isolated within the EU.

"We're not being excluded: we are in the European Union, we are a leading member of the single market, and when it comes to defence we're the leading member of Nato. When it comes to driving forward European foreign policy, we're actually one of the leading members of that," he insisted.

Instead the leader insisted he was simply doing his job.

"You've never seen Britain actually say no to a European treaty before: that's what's changed. There was a treaty on the table, it didn't adequately protect Britain's interest. Instead of going along with it, I said no to it. I think that's my job."

In a sign of emerging coalition tensions in Westminster, Nick Clegg said eurosceptics who were "rubbing their hands in glee about the outcome of the summit last night should be careful what they wish for."

"Conservative MPs have to be careful about what they wish for because clearly there is potentially an increased risk of a two-speed Europe in which Britain's position becomes more marginalised and in the long run that would be bad for growth and jobs in this country."

Earlier in the day the Lib Dem leader had defended the prime minister's demands had been "reasonable".

"The demands Britain made for safeguards, on which the coalition government was united, were modest and reasonable. They were safeguards for the single market, not just the UK," he said.

However there could be trouble ahead for Clegg, as several Lib Dems have expressed unhappiness at the outcome of the summit.

Former Treasury minister Lord Oakshott said Cameron had been "very, very foolish" and it was vital that the UK kept friendly relations with European nations.

"We're like the grumpy uncle who has walked out and is on the fringe," he told Sky News.

The prime minister has come under heavy criticism for vetoing the EU deal. Ed Miliband said it was a "terrible outcome" for Britain which would lead to the UK being "excluded from key decisions that affect our future".

“I really fear the consequences for our country. David Cameron has not put in the hard yards of negotiation. He could have carried on negotiating today to get a better outcome for Britain", the Labour leader told Sky News.

Former foreign secretary Lord Owen asked: "Is this coalition able to really represent British interests or are we being driven by about 80 to 90 Conservatives who really want us to get us out of the European Union?"

The treaty governing all 27 EU members is now likely to be abandoned, but the 17 eurozone countries will continue to negotiate a separate stability pact, and nine of the 10 EU members not in the single currency have chosen to endorse that process.

The UK will be the only EU member left outside the deal, the Council of Europe has indicated, despite earlier suggestions that Sweden, Hungary and the Czech Republic would not take part.

German Chancellor Angela Merkel said Europe would not "make a lousy compromise" to placate Britain.

In a press conference on Friday she said: "The British were never part of the euro, they had an opt out from the beginning so we are familiar with the situation.

"We couldn't make a lousy compromise for the euro but we had to set up hard rules. That's how it was. But that will not stop Europe going forward together on other issues."

The treaty would, if agreed, have created mechanisms to harmonise budget and tax rules across Europe and to enforce fiscal responsibility - keeping budget deficits in check - in all of the members of the eurozone. It would have used existing EU institutions to enforce the new rules.

UKIP leader Nigel Farage said that Cameron's actions on Thursday night "marked the beginning of the end of Britain's membership of this union", adding: "I expect in the coming weeks and months for there to be an overwhelming demand in Britain for an in/out referendum."