David Cameron faces Cabinet backlash after he agrees to EU treaty Britain vetoed last year

• Anger at PM's decision to agree to allow eurozone countries to use European Court of Justice to police their fiscal policies
• PM mocked by Ed Miliband as he defended his actions in the Commons
• Top Conservative MEP accuses Government of 'changing position' after Cameron's December veto
  
• Ed Miliband: 'If you walk away from the negotiating table, you can't get a good deal for your country'
• 70 MPs back campaign calling for a referendum on future of UK in EU
  

By Jason Groves
UPDATED: 18:45, 31 January 2012

David Cameron was facing a backlash within his own Cabinet today after softening his opposition to a new European treaty he vetoed last month.

Downing Street confirmed that the Work and Pensions Secretary Iain Duncan Smith and Northern Ireland Secretary Owen Paterson had both raised concerns at this morning’s weekly Cabinet meeting about Mr Cameron’s apparent change of heart in Brussels.

The Prime Minister was also attacked by Labour leader Ed Miliband in the Commons this afternoon after he made a statement to explain why he has given the green light to the Eurozone countries using the European Court of Justice to police a new ‘fiscal compact’.

Mocking Mr Cameron's claim he vetoed last month's treaty, Mr Miliband said: 'With this Prime Minister a veto isn't for life, it's just for Christmas.'

Updating MPs on the latest European Council (EU) summit, the PM said the eurozone debt crisis was having 'a chilling effect' on the UK economy

And he told the Commons: 'I went to the European Council last December prepared to agree a treaty of all 27 countries, but only if there were proper safeguards for Britain.

'I did not get those safeguards so I vetoed that treaty.'

Labour MPs scoffed with laughter as Mr Cameron continued: 'As a result, eurozone countries are now making separate arrangements outside the EU treaties for strengthening budgetary discipline, including ensuring there are much tougher rules on deficits.'

Twenty-five of the 27 EU countries agreed yesterday's Brussels deal, with just Britain and the Czech Republic failing to opt in.

But he pointed out that Britain remains outside the deal, which forces Eurozone countries to adopt tough austerity measures.

Labour leader Ed Miliband, who has refused to say whether he would have signed the treaty last month, said the Prime Minister ‘seems to have sold us down the river on a lot of things’.

Furious Eurosceptics compared the Premier to his predecessor Mr Major after he agreed eurozone countries could use the European Court of Justice to police the rules of their new fiscal compact to prop up the single currency.

British diplomats have negotiated changes in the wording of the treaty which they believe will ensure that the Court of Justice is not used to meddle with the single market, which Britain is signed up to.

But the Conservative leader in the European Parliament issued a withering press release after a meeting with the Prime Minister, saying he had no choice but to agree to the plans because Mr Clegg wanted the treaty to go ahead.

Martin Callanan said: ‘There is no doubt that the Government’s position has altered since the December summit.

‘I blame a combination of appeasing Nick Clegg, who is desperate to sign anything the EU puts in front of him, and the reality that this pact is actually quite hard to prevent.’

Today Ed Miliband said Mr Cameron lost the opportunity to defend Britain’s interests in negotiations when he walked out of talks on the new treaty last month.

Mr Miliband told Sky News: 'If you walk away from the negotiating table, it is very hard to secure a good deal for your country.

'He went into these talks saying his real worry was about financial services and how that would be affected if other countries went ahead. He has secured no extra protections for financial services.'

Mr Cameron was monitored yesterday by a member of Mr Clegg’s staff – a symbol of the distrust between the coalition partners on Europe after Mr Cameron’s veto caught the Deputy Prime Minister by surprise.

Tory backbencher Philip Davies said: ‘We saw how popular David Cameron was in the opinion polls after he used his veto. We don’t want David Cameron to go down the road of waving the white flag.

‘This will define whether he’s seen as a Thatcher or a Major, and I’m afraid the comparison will be with John Major.’

Tory MEP Dan Hannan said: ‘December’s “veto” turns out to be nothing of the kind; at best, it is a partial opt-out. Britain had asked for concessions in return for allowing the other member states to use EU institutions and structures for their fiscal compact.

‘No such concessions were forthcoming, but we have given them permission anyway.’

Privately British officials made clear that they think the fiscal compact is unwise and will lock smaller European countries in a German-imposed financial straitjacket.

Mr Cameron received a small boost when the Czechs decided not to back the fiscal compact, leaving Britain in a minority of two rather than one.

Germany backed down yesterday over plans to impose a Brussels economic commissioner on Greece to force it to cut spending.