Andrew Grice: Cameron is raising great expectations that may lead to a very bleak House

Inside Politics: Mr Cameron said he would not let matters rest if the Lisbon Treaty became law, he is doing just that

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On the eve of Guy Fawkes Day, David Cameron produced a typically impressive firework display as he explained his new policy on Europe at a press conference.

When he performed the same show for Tory MPs earlier, even hardened Eurosceptics were dazzled by his promises to repatriate powers from Brussels if he becomes prime minister, ensure that British courts are not overriden by the European Court of Justice (ECJ) and call a referendum before any future treaty transfers powers to the EU. It seemed fair compensation for his inevitable retreat from a referendum on the now-ratified Lisbon Treaty.

Four days on, many sceptics fear the new policy is a damp squib. Although some European politicians reacted with horror to the demands a Cameron government would make, they also made clear it would have little chance of success. Britain's EU partners should be celebrating, not moaning. The Tory leader's most important statements were that his government would have far more important things than Europe to worry about – the economy, stupid – and that he did not want a "massive Euro-bust-up".

His proposed "guarantees" of British sovereignty may prove worthless. European law takes precedence over British law under the 1972 Act which took us into the EU. Sceptics believe that, unless Britain is prepared to threaten to pull out, it would have no chance of winning the Tories' proposed opt-outs on employment law and criminal justice or persuading the other 26 EU members that British courts could ignore ECJ judgements.

Tory Europhobes thought they were close to getting the government of their dreams. They were sure that Mr Cameron was "one of us". By instinct, he is. But he also wants to be a successful prime minister and does not want his administration dominated by a pitched battle with Europe, which would leave most voters bemused.

Sceptics were delighted he pulled Tory MEPs out of the mainstream centre-right European People's Party in the European Parliament, which includes the parties of Nicolas Sarkozy and Angela Merkel. But this diversion allowed them to take their eyes off the main ball – Tory policy. Mr Cameron pledged repeatedly he would "not let matters rest" if the Lisbon Treaty became law, but now seems to be doing just that. One depressed Europhobe MP told me: "We have won every battle in the last 10 years. Yet we have somehow managed to lose the war."

How did it happen? Ten years ago, an effective Eurosceptic campaign group was set up, well-funded by businessmen. The No campaign enjoyed several different lives – it successfully opposed Britain joining the single currency (with a bit of help from Gordon Brown) and then helped see off the grandiose European constitution (forerunner of the Lisbon Treaty). The campaign guarded its independence from the Tory machine but provided the party's MPs with valuable ammunition, acting as a rallying point and outrider for the sceptics' cause.

When it turned into Open Europe in 2005, it became more of a thinktank. Rodney Leach, who chaired the No campaign, was made a Tory peer. Critics say the group became a way for the Tory leadership to usefully herd the "sceps" into one pen and keep them under the party's control. Some Europhobic MPs regret the "deliberate dismantling" of the original campaign, admitting they are a bit lost without it.

Mr Cameron holds the whip hand – for now. Most Tory MPs, however bruised, don't want to rock the party's boat and be accused of jeopardising its first election victory for 18 years. But there is tension not far beneath the surface, and not only among the usual backbench suspects. Some Shadow Cabinet members are seething they were not told about the new policy until Tuesday, two days after it started leaking out.

Some feel let down by William Hague, the shadow Foreign Secretary, who has a reputation as a Europhobe but has loyally backed Mr Cameron's decision to relegate Europe down the Tory pecking order. Some colleagues suspect Dominic Grieve, the shadow Justice Secretary, has led Mr Cameron up the garden path by advising that his proposed Sovereignty Act would ensure the sovereignty of the UK Parliament. Similarly, they fear the Tories' proposed British Bill of Rights will not stop terrorists being freed under the European Convention of Human Rights.

There is a pattern here. Some shadow ministers are worried that Mr Cameron is raising dangerously high expectations he will be unable to fulfil. He decided to toss the sceptics a few bones rather than starve them to death now. But he may be looking for a "third way" on Europe that does not exist.

If Mr Cameron becomes a popular prime minister, his MPs probably won't kick up too much on Europe. But if the EU pledges he announced this week did not amount to a row of French beans, and if a Tory Government became unpopular as it cut public spending, he would need all the backbench support he could muster. It is then that he may find he has few friends among the Eurosceptics who dominate his backbenches, who will no longer regard him as "one of us". And that will spell big trouble.

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