Britain has used its veto on a new EU treaty as all-night talks fail to produce a single agreement by all member states.
Following last night’s talks in Brussels on the future of the European Union, Britain has opted not to remain within the accord who will help to solve the euro crisis.
Mr Cameron said it was not in Britain’s interest “so I didn’t sign up to it”.
There are 27 member nations of the EU. Following the talks it looks likely that Britain and Hungary will stay outside the accord, while Sweden and the Czech Republic will consult with their parliaments on their involvement.
French President Nicolas Sarkozy was unambiguous about where the blame lay for the failure to reach cross-member consensus. He said that a full agreement “wasn’t possible, given the position of our British friends”, at the end of 10-hours of negotiations.
Before the EU treaty talks, the prime minster was under considerable pressure from eurosceptics in the UK to protect Britain’s interests, especially the freedom of the City of London. It was feared that joining a eurozone accord would force the UK’s financial sector to comply with a financial transaction tax being proposed to help pay for the eurozone debt.
By vetoing joining the accord, Mr Cameron seems to have stuck to his guns and placed the interests of the City first.
Commentators this morning, including the BBC’s political editor Nick Robinson, have said the decision will have huge consequences for Britain’s relationship with Europe, implying that doing business between the countries will be far more challenging than before.
The eurozone countries will now sign an intergovernmental accord intended to stabilise the European currency. This will also involve other EU members that want to join.
Mr Cameron told a news conference: “We want the eurozone countries to come together and solve their problems. But we should only allow that to happen within the EU treaties if there are proper protections for the single market, for other key British interests.
It has been reported that Mr Cameron was in touch with deputy prime minster Nick Clegg, whose Liberal Democrat party is more pro-European than their Tory colleagues in the coalition, throughout the EU treaty negotiations.
John Cridland, CBI Director-General, said:
“The mist is still clearing on the implications of the new treaty. New fiscal rules seem to be coming together but the all-important question of lender of last resort does not seem to have been resolved yet. The markets will decide if what has been done over the last two days is enough.
“The politics of this issue are clearly complex and we look forward to the Prime Minister’s full statement in the House.”