David Cameron in EU treaty legal warning

David Cameron tonight denied that he had been forced to back down over his high-profile European treaty veto.

The Prime Minister was derided by Labour after it emerged that key EU institutions could be used to enforce the new fiscal pact.

But he insisted the arrangements between 25 member states would not damage Britain's national interest - and the Government could take legal action if it did.

The UK blocked a full treaty of all 27 countries setting rules for eurozone fiscal discipline at the December summit of the European Council.

The Czech Republic has joined Britain in saying it would not sign up to the deal, expected to be finalised in March.

As he reported back to the Commons on the outcome of the latest summit, the premier faced mockery from Ed Miliband.

Mr Cameron had originally promised that EU institutions such as the European Commission and European Court of Justice would not be allowed to support the new agreement, the Labour leader said.

"With this Prime Minister, a veto is not for life, it's just for Christmas," he joked.

"He said it was a real veto on the use of EU institutions and his backbenchers believed him, even his Cabinet believed him.

"On the European court, on the Commission, on the buildings, the phantom veto of December is now exposed."

Mr Miliband also rejected Mr Cameron's claims that there was no new European treaty because he had vetoed it.

"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."

However, Mr Cameron said some use of the institutions by the group of 25 was already permitted by existing EU treaties.

"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," he said.

"The new agreement sets out roles for the European Commission and the European Court of Justice.

"While some of those roles are already permitted through existing treaties, there are legal questions about what is planned.

"It is in Britain's interest that the eurozone sorts out its problems and it is also in our interest that the new agreement outside the European Union is restricted to issues of fiscal union and does not encroach on the single market.

"The new inter-governmental agreement is absolutely explicit and clear that it can't encroach on the competencies of the EU and they must not take measures that in any way undermine the EU single market.

"Nevertheless, 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.

"The principle that the EU institutions should only act on the explicit authorisation of all member states remains."

Mr Cameron added: "This is a treaty outside the EU. We are not signing it, we are not ratifying it, we are not part of it, and it places no obligations on the United Kingdom.

"It doesn't have the force of EU law for us, nor does it have the force of EU law for the EU institutions, nor does it have the force of EU law for the countries who sign it.

"There will be no inner group of EU countries distorting the single market from inside the EU treaty. That is the fundamental protection we secured with our veto in December and that protection remains."

PA