Sarkozy wrongfoots Cameron as he calls for two-tier Europe

Any new EU treaty would prove difficult for PM to sell to his Conservative colleagues

David Cameron's hopes of avoiding a new European Union treaty were dealt a blow last night when Nicolas Sarkozy bowed to German demands for a new EU blueprint.

On the eve of one-to-one talks in Paris with Mr Cameron today, the French President said he and Angela Merkel, the German Chancellor, would propose a new treaty to "refound" the EU when they meet in the French capital on Monday.

Mr Cameron had hoped to enlist Mr Sarkozy's support for a revolt by some EU members against Germany's plans for a new treaty to entrench reforms to the eurozone. Their leaders are worried that referendums in countries including Ireland could delay the process for months or even years.

But as the price for a deal to resolve the long-running eurozone crisis, Ms Merkel is insisting on a new blueprint to entrench tough rules forcing eurozone countries to balance their books.

If a summit of EU leaders next week approves the Franco-German plan for a new treaty, Mr Cameron would come under pressure from Eurosceptic Conservative MPs to call a UK referendum on it. Although he would resist their demands, the treaty would still need to approved by the Commons and the House of Lords.

At next week's summit, the Prime Minister will warn fellow EU leaders that he would demand concessions for Britain in order to smooth the passage of a treaty through Parliament. These could include diluting the EU's "maximum 48-hour working week" directive in Britain.

Speaking in Toulon last night, Mr Sarkozy warned against a march towards a United States of Europe. But he declared that he and Ms Merkel would bring forward proposals to try to lift Europe out of its debt crisis and "guarantee" its future. "France will push with Germany for a new European treaty, refounding and rethinking the organisation of Europe," he said.

The Maastricht Treaty, which led to the launch of the single currency in 1999, had proved to be "imperfect," he added. "There can be no common currency without economic convergence, without which the euro will be too strong for some, too weak for others, and the eurozone will break up."

Mr Sarkozy admitted that negotiating a new treaty among all 27 EU members would be a "long and difficult" process. British ministers would probably have preferred a more limited deal among the 17 nations using the euro that would not require the approval of the 10 countries, including the UK, outside the currency zone.

Mr Cameron will seek assurances that the 17 must not act as a "caucus" which takes the key decisions for the EU and then imposes them on the10 "outs".

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