Nick Clegg defied David Cameron by calling for the pact on fiscal union planned by other European Union countries to be "absorbed" into the EU's governing treaties.
The move would anger Conservative Eurosceptics, who claim it would undermine the veto wielded by David Cameron at last month's EU summit. His veto forced the other 26 nations to forge a separate "treaty outside the EU treaties".
Incorporating the agreement would mean Britain accepting the deal.
The Deputy Prime Minister hosted a meeting of 15 senior Liberal politicians from around Europe in London yesterday, which called for the fiscal union designed to save the euro "to be rolled into the EU treaties in due course".
Mr Clegg, who was furious that Mr Cameron did not try harder to avoid isolation at the Brussels summit, said Britain should get "stuck in" to EU negotiations and not "retreat to the margins." He added that the UK should be "engaged, not disengaged".
He told a press conference that Europe could only overcome its economic crisis by sticking together and avoiding "needless rivalry and isolation".
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