EU gives Ireland an ultimatum – find a solution to treaty 'no' vote

European Union leaders last night gave Ireland just four months to produce a way out of the crisis over the Lisbon Treaty caused by its rejection by the Irish people in last week's referendum.

Although EU leaders denied the charge of "bullying" the Irish government, they set an October deadline for it to explain how it could win public support for the ill-fated treaty designed to streamline the EU's decision-making process.

Over dinner at a two-day summit in Brussels, the other 26 EU members agreed not to "shame" Ireland despite their private dismay that the "yes" campaign had managed to lose last week's referendum.

The treaty cannot be implemented until it has been ratified by all member states. However, the dinner broke up late last night without agreement on the wording of a statement on a way out of the crisis. The stumbling block was the Czech Republic, which has suspended its plans to ratify the treaty. EU leaders will make another attempt to agree a form of words when the summit resumes today.

Ireland's "no" vote forced a summit due to address "real world" issues of soaring oil and food prices to again look inwards at how the EU works. Although the treaty is in limbo, the EU leaders refused to kill it off. "It's the only show in town – we are not going to get a better one," said one European Commission source.

Other EU members expect a second Irish referendum next year but the Irish government, which fears it could collapse if it appears to be defying last week's vote, wants to proceed cautiously. The summit acknowledged its problems by giving Dublin until the next EU leaders' meeting in October to produce a plan to ratify the treaty.

Possible sweeteners include a guarantee that Ireland will not lose its seat on the European Commission and safeguards to preserve its neutrality and ability to control its own policies on issues such as tax and abortion.

But Brian Cowen, the Irish Prime Minister, conceded yesterday that it would be "extremely difficult" to find a solution acceptable to the Irish people. "I believe the decision [to reject the treaty] will be respected," he said. "Any decision must be viable for Ireland and for Europe."

Although EU leaders duly promised to show such "respect", there were tensions beneath the surface about how to proceed – especially if Ireland fails to deliver a route map in October. Silvio Berlusconi, the Italian Prime Minister, spoiled the attempt to put on a united front by complaining that the current group of EU leaders had "less personality" than their predecessors.

Tony Blair's one-time holiday companion singled out Gordon Brown, along with the Spanish, French and German premiers. But Mr Brown laughed off the apparent insult and his officials said he had a "very warm exchange" with Mr Berlusconi at the summit.

Mr Brown won plaudits from his EU counterparts for pressing ahead with the Bill implementing it after the Irish "no" vote. It received Royal Assent yesterday.

After a working lunch with Mr Brown in Paris, the French President, Nicolas Sarkozy, said the Prime Minister had displayed "political courage". He added: "He did this with much commitment and much strength."

Angela Merkel, the German Chancellor, said Europe could not afford another "period of reflection" but rejected the idea of pressing ahead without Ireland.

* The EU broke ranks with the United States by agreeing to lift its sanctions against Cuba in an attempt to encourage the country to extend human rights.