Right-wing Euro alliances are good for Britain, says PM

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Portugal provides more evidence of Europe going in Mr Blair's direction

The Sketch: If Europe is genuinely being shaped in Britain's image, God help it

Tony Blair vowed yesterday that he would continue to build alliances with right-wing governments in Europe and insisted that his strategy would enhance Britain's influence in the European Union.

The Prime Minister faced criticism when he made a Commons statement on the weekend EU summit in Barcelona over his decision to agree a joint statement before the meeting with Silvio Berlusconi, the controversial Italian Prime Minister, opposing a further extension of workers' rights.

Charles Kennedy, leader of the Liberal Democrats, warned that Mr Blair's "cavorting" with Mr Berlusconi threatened to undermine the coalition needed to win a single-currency referendum because it had angered the trade unions.

Ian Davidson, the Labour MP for Glasgow Pollok, said there was great concern that a Labour Prime Minister appeared to align himself with Spanish Conservatives and Italian neo-Fascists after Labour had marginalised the right in Britain.

An unrepentant Mr Blair said he had been very happy to work with Italy and Spain in the run-up to the Barcelona summit. He said he had built alliances with seven govern- ments, including the centre-left administrations in Germany and Sweden. He said he would continue "without any hesitation or apology" to work with all EU governments when he believed this was in Britain's interests.

The Prime Minister said he saw no problem in working across traditional lines without "ideological prejudice". That helped Britain to "make a difference" in Europe, a contrast to the isolation of the previous Tory government. Mr Blair also came under fire over the outcome of the summit, called to discuss economic reform in the EU. Iain Duncan Smith, the Conservative leader, dismissed most of the summit conclusions as "Euro waffle" and told the Prime Minister: "The truth is that Barcelona was, once again, about fine words from you and no action."

He added that the meeting had again failed to address the need for reform of the Common Agricultural Policy and the Common Fisheries Policy. "Without this sweeping reform all talk of economic reform founders at the first hurdle." The summit, he said, had "achieved so little and at such great cost".

Mr Blair said the EU had made "solid but limited" progress on reform, pointing to the decision to open up commercial gas and electricity to competition by 2004, more than 60 per cent of the total market in these two industries.

He said the EU was now being shaped in Britain's image because the Government was "in there" pursuing its interests in a constructive way. "Under the last Conservative government, Britain was marginalised, without influence appropriate to our weight and size, in the isolation room," he said.

Nicholas Soames, a Tory former armed forces minister, said it would be an act of "culpable folly" to attack Iraq before there was a proper move towards resolving the Middle East peace process. Mr Blair said no decision had been taken on any action concerning Iraq and welcomed America's interest in the peace process.