Nick Clegg promised to rebuild the government's shattered relationship with the rest of Europe and risked opening a coalition rift by going public with his "bitter disappointment" at David Cameron's decision to block a new EU agreement.
The deputy prime minister said Britain risked becoming "isolated and marginalised" from the European mainstream and, along with seniorLiberal Democrats, spent the weekend contacting European leaders in a "strategy for re-engagement to recover lost ground", according to a senior government source.
Several high-profile figures, including the former leader Paddy Ashdownand the party president, Tim Farron, joined Clegg in a wide-ranging attack on Cameron's resort to a British veto.
Clegg will hold a meeting with business leaders this week to convince them "they had not completely had the door shut", according to an aide. There is growing concern that the 26 EU countries who agreed on greater fiscal integration last week will now be able to strike deals affecting British banks and businesses.
The business secretary, Vince Cable, who warned the prime minister in Cabinet last Monday against the strategy he went on to follow in Brussels, is concerned that global companies including banks and pension funds will now shun investments in the UK, having previously favoured it as a "gateway" to the continent.
Clegg was biting in his critique of developments in Brussels but spoke of correcting the path chosen by Cameron by getting "back into the saddle". "I'm bitterly disappointed by the outcome of last week's summit, precisely because I think now there is a danger that the UK will be isolated and marginalised within the European Union," he told the BBC's Andrew Marr Show.Read more.