BRTIAIN’S demands at last week's European Union summit represented a "risk to the integrity of the internal market" which was impossible for other member states to accept, European Commission President Jose Manuel Barroso said today.
In comments which appeared to show exasperation with David Cameron's negotiating tactics, Mr Barroso told MEPs that talks dragged on into the early hours not because of any dispute over the content of the new "fiscal compact" for the eurozone but because Britain would not accept amendments to the Lisbon Treaty.
He insisted that the Prime Minister's decision to deploy the UK's veto to block treaty change did not amount to a "split" between the 17 euro states and the rest. Friday's accord between 26 EU states was "not an agreement at 17-plus, but an agreement at 27-minus", he said.
Mr Barroso was addressing the European Parliament in Strasbourg as Conservative and Liberal Democrat members of Mr Cameron's Cabinet met face-to-face for the first time to discuss the fallout of last week's events.
The weekly meeting came a day after the depth of their rift over Europe was laid bare by Nick Clegg's decision not to attend the Commons as David Cameron defended his decision to wield the veto.
In an interview given as the Prime Minister received the plaudits of Tory eurosceptics for his refusal to sign up to a new treaty, his Lib Dem deputy said that he had stayed away to avoid becoming a "distraction" and insisted the coalition was "here to stay".
Mr Cameron also indicated a willingness to engage "constructively" with the other 26 EU states on the use of EU institutions to support their new inter-governmental agreement.
But the Lib Dem leader, accused of "cowardice" by one Tory MP and mocked as "spineless" by Labour, admitted he and Mr Cameron "clearly do not agree on the outcome" of last week's EU summit.
He renewed his warning that leaving Britain isolated was "potentially a bad thing for jobs, a bad thing for growth and a bad thing for the livelihoods of millions of people in this country".
Mr Barroso told MEPs that he, European Council President Herman van Rompuy and Euro Group President Jean-Claude Juncker put forward a proposal last Thursday for treaty change to introduce new fiscal discipline, which would have applied only to the eurozone but required the approval of all 27 EU members.
"As you know, one member state was opposed to amending the Lisbon Treaty," said Mr Barroso.
"The United Kingdom, in exchange for giving its agreement, asked for a specific protocol on financial services which, as presented, was a risk to the integrity of the internal market.
"This made compromise impossible.
"All other heads of government were left with the choice between paying this price or moving ahead without the UK's participation and accepting an internal agreement among them."
Mr Barroso said that in search of compromise, he tabled a clause which made clear that the measures in the fiscal compact applied only to the eurozone and must not undermine the single market or permit any discrimination against non-euro states.
But he added: "Unfortunately, that compromise proved impossible and so it was not possible to have a solution that could allow all 27 member states to agree in the framework of current treaties."
The Commission President told MEPs: "Fortunately, we have not seen a split in the EU between the 17 and the other 10 ... This is not an agreement at 17-plus, but an agreement at 27-minus.
"Last week, most heads of state or government of the member states showed their willingness to move ahead with European integration towards a fiscal stability union. They showed that they want more Europe, not less."
Discussion of the future of Europe will resume in the Commons later after Northern Ireland's Democratic Unionist Party (DUP) chose it as the subject of its opposition day debate.