Nick Clegg
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Lib Dem leader Nick Clegg: 'Avoid a two-speed Europe'

David Cameron has defended his decision to block an EU-wide treaty change to tackle the eurozone crisis, despite warnings it will leave the UK isolated.

It looks likely that all 26 other members of the European Union will instead agree to a new "accord" setting out tougher budget rules.

Labour said the UK would be left out of key decisions affecting its future.

The Deputy Prime Minister Nick Clegg said he regretted the outcome but that the Prime Minister's requests for safeguards for the British economy had been reasonable.