'Positive engagement': German Chancellor Angela Merkel chats with Prime Minister David Cameron during a welcome ceremony in Berlin yesterday
Smile and smile and... :French President Nicolas Sarkozy and Prime minister David Cameron give a press conference after their dinner at the Elysee Palace on Thursday night
David Cameron yesterday signalled he was ready to veto any EU treaty to prop up the ailing euro - as he sought to calm pressure within his own party for a referendum on Europe.
Speaking in Berlin alongside German Chancellor Angela Merkel, Mr Cameron became the first British Prime Minister to threaten a veto since John Major.
Mrs Merkel greeted Mr Cameron with a lavish ceremony before the Reichstag today amid political tensions over the euro
Mon ami: Mr Sarkozy pulls a Clegg and gives Mr Cameron a pat on the back last night
His uncompromising language was designed to calm Eurosceptics among his own MPs, who are unhappy pledges to repatriate powers from Brussels have been scrapped as part of the coalition deal with the Euro-friendly Lib Dems.
Mr Cameron insisted Britain would not be 'drawn further' into supporting the single currency and said: 'There is no question of agreeing to a treaty that transfers power from Westminster to Brussels.
'Britain obviously is not in the euro and Britain is not going to be in the euro, and so Britain would not be agreeing to any agreement or treaty that drew us further into supporting the euro area.'
He went on: 'It goes without saying that any treaty, even one that just applied to the euro area, needs unanimous agreement of all 27 EU states including the UK, which of course has a veto. I think these are very important points But critics suggested he could be forced to concede a referendum if the EU pushes ahead with plans to impose 'European economic government'.
Britain has already been bounced into backing a £650billion euro bailout, which could end up costing UK taxthepayers more than £8billion.
Yesterday the Germans used a separate summit of EU finance ministers in Brussels to push forward a package of measures designed to prevent a repeat of the Greek crisis which is threatening to bring euro to its knees.
The package is reported to include a proposal that all EU countries, including Britain, could be forced to have their budgets signed off by the European Central Bank.
Chancellor George Osborne insisted Britain would not sign up to any deal that handed fresh powers to Europe.
He said: 'Tax and spending decisions are issues where we are accountable to Parliament.'
But Mats Persson, director of the Open Europe think tank, said momentum within the EU suggested that treaty changes lay ahead.
He said: 'If this ends up involving any transfer of powers to Brussels then the coalition has to call a referendum. The crisis has already sucked us into the bailout package and there is a clear drive to put new controls in place, some of which will include the UK.'
Yesterday's mini- summit between Mr Cameron and Chancellor Merkel came as the German parliament narrowly approved its share of the Greek bailout.
Uncertainty over whether the deal would be passed had seen sharp falls on stock markets around the world.
London's FTSE 100 index dropped below 5,000 for the first time in seven months, while fears of a eurozone crisis, have wiped £200billion of the value of London's blue chip shares since April.
But the U.S. Dow Jones index steadied nerves, rising 100 points to 10169. This helped the FTSE claw back its earlier losses to close down just 10 points at 5063.
The sense of urgency heightened after it emerged that U.S. Treasury Secretary Timothy Geithner is flying into Europe next week to hold emergency talks with Mr Osborne and other European leaders.
