Cameron: EU membership is vital to Britain

Prime Minister David Cameron defended his decision to break with European partners by vetoing a change to the EU treaty, insisting today that remaining a member of the 27-nation bloc was in Britain's national interest.

"Britain remains a full member of the EU and the events of the last week do nothing to change that. Our membership of the EU is vital to our national interest. We are a trading nation and we need the single market for trade, investment and jobs," Cameron told parliament during a noisy debate on last week's European Union summit.

"We are in the EU and we want to be," he said.

Cameron's decision not to take part in an EU treaty change aimed at tightening fiscal rules for countries using the euro has isolated Britain in the 27-nation bloc and created the biggest rift in his coalition since he took power in May 2010.

The prime minister's ambiguous answers on Friday to questions over Britain's future membership of the EU sparked speculation that the UK may now be contemplating a future outside the EU, although analysts say that would damage Britain's economy.

Cameron said the choice he had faced was a treaty without proper safeguards for Britain's important financial services industry or no treaty. "The right answer was no treaty," he said. "It was not an easy thing to do but it was the right thing to do."

Cameron's decision won praise from eurosceptics on the right wing of his Conservative Party but brought a backlash from his pro-European Liberal Democrat coalition partners.

At the Brussels summit on Friday, Cameron vetoed a plan for a new EU treaty that would impose closer EU control over national government budgets to curb the bloc's debt crisis. Cameron said the proposed deal risked exposing London's powerful financial services industry to unwelcome EU regulation.

The other member states, including the 17 using the euro, now plan to adopt a separate pact without Britain, leaving the island nation potentially alone as never before in the EU, a club it joined in 1973 but which Britons have long viewed with distrust.