Senior Liberal Democrats have lined up to praise David Cameron after the prime minister bowed to pressure from Nick Clegg and abandoned attempts to block eurozone leaders from enforcing a new fiscal compact through EU institutions.
Amid some anger on the Tory right over Clegg's tactics on the EU, the former Lib Dem leader Sir Menzies Campbell praised the prime minister for re-engaging with Britain's European partners.
The easing of tensions between the coalition partners over Europe came as Ed Miliband mocked the prime minister for backtracking on his veto at December's EU summit.
Cameron prevented EU leaders from embedding a new fiscal compact for the eurozone in EU treaties after failing to win safeguards to protect the City of London. Leaders of 25 EU countries, bar Britain and the Czech Republic, this week agreed a treaty outside the architecture of the EU after the prime minister agreed to the use of EU institutions to police the new measures. But Britain will take legal action if the eurozone, or a eurozone country such as France, attempts to use EU institutions to re-write the rules of the single market as part of the enforcement of the fiscal compact.
The Labour leader said: "With this prime minister, a veto is not for life, it's just for Christmas. He said it was a real veto on the use of EU institutions and his backbenchers believed him, even his cabinet believed him."
Miliband then echoed his bother, David, who accused the prime minister in December of wielding a "phantom veto against a phantom threat". The Labour leader said: "On the European court, on the commission, on the buildings, the phantom veto of December is now exposed."
Miliband also dismissed the prime minister's claims that he had ensured there would be no EU Brussels treaty incorporating the fiscal compact. "It talks like a European treaty, it walks like a European treaty, it is a European treaty," he said.
"And for Britain he has secured absolutely no protections at all."
The deputy prime minister, who missed Cameron's statement to MPs after the December summit, took his place next to the prime minister for Tuesday's statement. Clegg insisted in the days after the summit that the prime minister should drop his threat to block the use of EU institutions in enforcing the fiscal compact.
Campbell showed that the party believed it had scored an important victory within the coalition as he praised the prime minister. He said: "May I begin by praising the pragmatism of the prime minister, although I confess to being somewhat surprised that my support for that pragmatism isn't shared throughout the government benches. What is especially welcome is that over the weekend he pursued a policy of re-engagement with our European partners which is essential to his long term objectives of the promotion of growth and the extension of the single market."
Simon Hughes, the Lib Dem deputy leader, asked the prime minister: "Can he agree that his constituents, like mine, want the government to concentrate, as Europe is united in doing, to concentrate on jobs and growth and training and skills and not obsessing and constitutional and treaty niceties?"
Cameron replied: "[You are] entirely right. The refreshing thing about this council is how much time was spent on the nitty gritty of the single market, on digital, on services, on energy markets."
Tory Eurosceptics were muted in their criticisms. Bill Cash, the veteran Eurosceptic Tory, asked the prime minister to give an assurance that he would reject the proposal in the fiscal compact to fold the measure into EU treaties. Clegg has said this should happen as long as Britain wins assurances that its place within the single market will be protected.
Cash asked: "Will he accept that the problem we have in European policy making is that it is on a slippery slope towards a more coercive, more federal and less democratic Europe? Will he give us his assurance that never, while he is prime minister, will we fold this non-EU treaty into the treaties as a whole?"
Cameron replied: "Obviously this treaty cannot be folded back into the EU without the agreement of every EU member state. We did not sign this treaty, because we did not get the safeguards that we wanted, and that position absolutely remains."
The relatively light pressure from his own benches prompted the prime minister to turn his fire on Miliband for criticising him for vetoing the fiscal compact while saying that the measure would impose overly austere measures on the eurozone. Cameron said: "He has had 53 days to make up his mind whether he wants to sign this treaty or not. As usual, he cannot make up his mind whether he is muddled or weak. The fact is he is both."
