A drive to "pick up the pieces" will be led by Nick Clegg following the collapse of last week's European Union summit. But there were new strains in the Coalition after Liberal Democrat ministers criticised David Cameron's negotiating tactics during a heated Cabinet discussion yesterday.
Chris Huhne, the Liberal Democrat Climate Change Secretary, complained that his party should have been consulted during the talks in Brussels which ended with Britain in a minority of one last Friday. He contrasted Mr Cameron's approach with his own during the global climate change talks in Durban, saying he cleared his lines with other ministers as the meeting progressed.
Mr Huhne, a former MEP, is said to have interrupted the Prime Minister twice as he summed up yesterday's 50-minute Cabinet debate, protesting that Mr Cameron had not addressed his points directly. Last night Mr Huhne went public with his criticism of Mr Cameron. "Isolation is not a good posture in any negotiation," he said. "Playing 'Billy No Mates' is no fun and is not effective in defending British interests." He warned: "Businesses [abroad] need to know that we have influence in delivering the single market. If they feel, sitting in a boardroom in Shanghai, that we don't have influence then it is very likely they will be less attracted to investing here."
Mr Clegg told Liberal Democrat MPs and peers last night the row would not bring the Coalition to an end. "The Government will carry on until 2015. Full stop," he said.
Other Liberal Democrat ministers – Mr Clegg, Danny Alexander and Michael Moore – told the Cabinet they were unhappy that Mr Cameron had wielded the veto to block an EU-wide treaty aimed at rescuing the single currency. Vince Cable, the Business Secretary, is understood to have expressed concern about the possible impact on business and foreign investment in Britain if the country is viewed as not fully committed to the EU. But Tory ministers defended Mr Cameron's decision to veto the proposed treaty, arguing that his hand in future negotiations would have been weakened if he had backed down.
After the meeting, both Tory and Liberal Democrat ministers stressed they were now looking forward rather than back at the summit. In future, the Liberal Democrats are expected to be consulted more fully during important EU meetings. Mr Cameron said: "We had a very good Cabinet meeting this morning where we talked about those challenges... and I think the Coalition will come out of this very strongly."
Following Mr Clegg's decision not to attend Mr Cameron's Commons statement on the summit on Monday, the Prime Minister appears to have offered him a key role in rebuilding Britain's bridges with other EU members. Mr Clegg will host a meeting of Liberal ministers from around Europe next month to discuss Britain's relationship with the EU and the eurozone crisis.
There are signs that some of the other 26 leaders realise it would be better to get Britain back on board as a formal EU treaty might carry more credibility with the financial markets. But Joseph Daul, a French MEP who chairs the Parliament's main centre-right group, said the UK was "selfish" and should lose the £2.7bn rebate on its EU budget contributions.