Tensions between David Cameron and Angela Merkel over the future of the European Union have spilled into the open with a German diplomat claiming Britain lacks "vision" and faces being left behind by other countries because all it can say is, "No, no, no".
Dr Rudolf Adam, deputy head of mission at the German embassy in London, told one of William Hague's ministerial aides that the Prime Minister's refusal to take a lead in Europe meant Britain would "just see the red lights of the train that has already left the station".
The outburst came days before the German Chancellor visits London for talks with Mr Cameron in what sources are describing as a "showdown" ahead of a summit on the EU budget next month.
Last week, Berlin was forced to deny a report in the Financial Times that Mrs Merkel was planning to pull the plug on the seven-yearly budget summit on 22 November if Mr Cameron threatened to veto anything but a freeze on spending. Yet Dr Adam's comments appeared to confirm that Germany is angry with Britain's stance.
At a Brussels summit earlier this month, Mr Cameron made clear he would block any real-terms increase in the EU budget, saying: "If there isn't a deal that's good for Britain, there won't be a deal. We can't have European spending go up and up and up when we are having to make difficult decisions in so many areas."
The Foreign Secretary tried to ease tensions between the two governments with a speech in Berlin last week that was broadly pro-Europe.
At a panel discussion organised by the think-tank Open Europe in London on Thursday, Tobias Ellwood, Parliamentary Private Secretary to the Europe minister David Lidington, said Britain needed to "get good at Brussels" to better explain the case to voters. Mr Hague is conducting a "balance of competencies" review, to be published in the run-up to the general election, of powers in all EU treaties in what is seen as paving the way for a possible referendum.
But Dr Adam told Mr Ellwood: "If you are talking about interests, you are talking about your ambitions and your aspirations. If you ask a German politician, he will probably talk about the federal states of Europe, and a European army."
Turning Margaret Thatcher's famous Eurosceptic mantra "No, no, no" against the UK government, Dr Adam added: "For the last 20 years from Britain, the comment on Europe has been 'No, no, no – we don't want this, we don't want that'. If you want to bring your power and your influence to bear, why does your government not develop a vision of what Europe should be like?
"To do that on the basis of a balance of competencies in 2014, you will just see the red lights of the train that has already left the station."
Mrs Merkel will visit London for talks with Mr Cameron on 7 November. At a meeting in Downing Street last Thursday, the President of the European Council, Herman van Rompuy, warned Mr Cameron that Britain could lose its rebate if the PM vetoed the budget.
Even though the 2014-20 settlement is yet to be agreed, this week MPs will vote on a motion on the EU budget, forced by the European Scrutiny Committee chaired by the Eurosceptic Tory MP Bill Cash. The vote could become a focus of a fresh revolt by Tory MPs who are still unhappy following the reshuffle and Mr Cameron's handling of the Andrew Mitchell affair.
Labour is planning to table an amendment which would call for a real-terms reduction in the budget, which could attract Tory rebels.
At the Open Europe event, Chris Leslie, the Shadow Financial Secretary to the Treasury, held out the possibility that Ed Miliband could promise a referendum in Labour's 2015 manifesto. Mr Leslie said: "It may be something that needs to be put in place in order to move forward, but it is not the right time now."