David Cameron: 'Euro trade links are a key interest'

Britain's top priority in Europe is protecting its trading links within the single market, David Cameron insisted today.

The Prime Minister said that work was already under way in Whitehall on the balance of powers between Westminster and Brussels but the "key national interest" was keeping markets open among the 27 member states.

Mr Cameron was pressed on the continuing fallout over Britain's place within Europe at a press conference in Perth with Australian prime minister Julia Gillard.

He joked that Ms Gillard should get involved in European meetings as the Commonwealth discussions had progressed at a "very good pace".

"We are looking at the balance of powers," he added. "That is in our coalition agreement and that work is already under way in Whitehall.

"I think it's right that it looks at the balance of powers, it looks at the different powers that are exercised at Westminster and Brussels.

"There's no question of powers being transferred from Westminster to Brussels, that is an important point to make, and I'm happy that that work is under way.

"I would just make this point, which is that as the 17 member states who are members of the euro push ahead with the things they quite rightly need to do in terms of having separate extra meetings, having separate extra governance, having extra processes, as I have said many times it is important that we safeguard the integrity of the single market of the 27.

"That is our key national interest, that Britain, a historic trading nation, has its biggest markets open and continues to have those markets fairly open and fairly governed.

"So irrespective of this balance of powers work it's very important that we make sure the single market is protected in the European Union.

"That's a point I made at the European Council on Sunday and again on Wednesday.

"I'm sure when we have the next one I'll be making it again and there are other members who are not in the euro who care very deeply about the single market that agree with the approach."

Tory eurosceptics have raised fears that those in the currency bloc will "gang up" against the others - described as caucusing.

Mr Cameron has insisted he is working to ensure safeguards are put in place to protect all 27 member states should, as the UK wants, the 17 euro countries introduce tighter fiscal integration.

He discussed the issue with fellow non-euro leaders in meetings on Monday while their counterparts wrangled over the details of the new package aimed at resolving the debt package, and revealed there was clear recognition of the potential problem.

Earlier, he told reporters travelling with him from the EU summit in Brussels to a meeting of Commonwealth leaders in Australia that the 27 needed "to make sure that the single market is adequately looked after".

"There are a lot of things the eurozone is doing together. Having more meetings alone, establishing machinery - it raises the question of could there be caucusing?"

And in a clear message to the European Commission that it had a duty to ensure fair operations across the board, he added: "It is very important that the institutions of the 27 are properly looked after and that the commission does its job as the guardian of the 27."

He highlighted the City of London as an area that faced increasing pressure and required protection.

"London is the centre of financial services in Europe. It's under constant attack through Brussels directives. It's an area of concern, it's a key national interest that we need to defend," he said.

Asked in a round of broadcast interviews later what the EU "attacks" on the City involved, Mr Cameron said it was "a mixture of things", including "badly drafted, badly formed" regulations.

The PM added: "Of course, all countries in Europe pursue their national interest.

"Would the French and the Germans like a larger share of financial services in Paris and Frankfurt? Of course they would.

"Well, I want to make sure we keep them in London. That's why we fight very, very hard for our national interest."

Deputy Prime Minister Nick Clegg insisted there was "no question" of unilaterally repatriating powers from Brussels and claimed plans for rebalancing the relationship with Britain were a long way off.

He also argued that "very few" countries wanted to open up the "fraught debate".

Mr Clegg told the BBC: "There's no question of us unilaterally repatriating powers from the European Union. It isn't on the cards, it wouldn't work, it is not possible.

"If there is going to be a debate about the rebalancing of the powers of the European Union and all its different member countries, our priority would be to promote British interests and particularly promote the open, economic reforms that I think are necessary for jobs and growth.

"We are nowhere near that yet because we don't even know if their treaty changes are going to take place at all."

He insisted Britain was "entirely within its rights" to defend its economic interests in the European Union but argued the way to do that was "by making sure you have a loud British voice at the top table".

"One of the ways we can do that is not by cowering on the sidelines but by actively arguing for open, competitive, liberalisation in the single market, which is after, all the world's largest borderless single market.

"There are a number of new regulations and laws which have been proposed at EU level for the city of London, some of which are entirely sensible and some are less sensible.

"That's why we need to constantly engage with other European Union countries to get these laws right."

Mr Clegg said the "spectacular implosion" in the City in 2008 was a result of failures in regulation and some of the reforms needed to prevent a repeat had to take place at EU level.

"But the devil is in the detail and some of the details, frankly, aren't quite right," he said.

"Some of the details disproportionately affect Britain and of course we want to make sure there is a proper open level playing field for the City of London and for all British businesses in all sectors."