BRITAIN is prepared to sue other European countries if the new financial agreement between 25 member states threatens our national interest, the country’s Prime Minister David Cameron said today.
Mr Cameron is under pressure over the fact that Britain, along with Czech Republic, will be excluded when the new group uses joint institutions, including the European Commission and the European Court of Justice.
Last month the Prime Minister vetoed a new European treaty for greater fiscal intergration between eurozone countries saying there were not enough safeguards for the City.
He today insisted that Britain would take robust action if the 25-member group's use of those institutions acted against the single market.
"I made clear we will watch this closely and if necessary we will take action, including legal action, if our national interests are threatened by misuse of the institutions," Mr Cameron said.
The Prime Minister rejected suggestions that Britain would be at a disadvantage in Europe, after he decided not to join the 25 countries who are tying their financial policies closer together.
However, he was challenged by Labour leader Ed Miliband, who said he had watered down his original plan to stop the group of 25 using European Union institutions.
"With this Prime Minister, a veto is not for life, it's just for Christmas," Mr Miliband told MPs. Backbench Conservative MPs are unhappy that Mr Cameron appears to have rowed back on his tough stance on safeguarding Britain's interests.
Mark Reckless, MP for Rochester and Strood, questioned whether Mr Cameron had really vetoed any treaty at all.
Earlier Mr Miliband accused David Cameron of selling Britain 'down the river' by leaving the UK isolated from Europe.
Mr Miliband said: "I'm very concerned about what David Cameron has done. He trumpeted last December that he had got a great deal for Britain and protected us.
"And the way Europe was going to go about thisTreaty wasn't going to affect Britain. Now he has sold us down the river on a lot of things.
"I am going to ask him what exactly has he agreed, what protections has he got for Britain. I take the simple view: he would have been better off staying at the table and negotiating for Britain rather than pretend he had made progress but failing to do so."
Mr Cameron was also accused of “appeasing” his deputy Nick Clegg by performing an about-turn on Britain’s veto against closer ties among eurozone countries.
Right wing Tory MPs were due to meet in Westminster to plot how to make clear their unhappiness ahead of a statement by Mr Cameron in the Commons.
The news came amid fears on international markets about Portugal’s economy after its cost of borrowing road to record levels.
Following the veto last month, Mr Cameron had pledged to stop the eurozone using the European courts and Brussels institutions to uphold its own, breakaway fiscal pact currently being set up outside the EU treaty.
But during negotiations between EU leaders on the new fiscal pact, the Conservative leader dropped the threat.
Martin Callanan, the leader of British Tory MEPs, said the decision was taken to “appease” the Liberal Democrats and because of a weak legal case.
Suspicions over Mr Clegg’s involvement increased after it emerged that Mr Cameron took one of the deputy Prime Minister’s officials to the summit.
Mr Callanan said: “There is no doubt that the government's position has altered since the December summit when they were insisting the institutions could not be used.
“I blame a combination of appeasing Nick Clegg, who is desperate to sign anything the EU puts in front of him, and the practical reality that this pact is actually quite hard to prevent."
Tory MP Philip Davies said: "We don't want David Cameron to go down the road of waving the white flag. This will define whether he's seen as a Thatcher or a Major. If he caves in I'm afraid the comparison will be with John Major."