Cameron gives statement to MPs over EU veto

On his absence from the PM's statement, Deputy Prime Minister Nick Clegg says he did not think people "cared that much who sits where in the House of Commons". "I would have been a distraction if I was there," he says, adding: "The prime minister and I clearly do not agree on the outcome of the summit last week." However, he insists that the coalition was "here to stay" until 2015.

With that, the PM's grilling is over. The Speaker says 101 backbenchers have had the chance to question the PM in 88 minutes.

Ian Austin, Labour MP for Dudley North, tries to make a reference to Nazi uniforms but is cut short by the Speaker who says he can "use other methods" to make his point. It comes after a Conservative MP apologised following reports he attended a stag party where Nazi slogans were chanted. The issue of Nazi fancy dress is addressed in today's BBC Magazine.

Conservative Robert Buckland says he's long supported the UK's membership of the EU - but still agrees that Mr Cameron made the right decision last week.

The prime minister says Labour are "tweeting, blogging and poking for all they're worth but they don't have a policy". He says the opposition still haven't said where they stand.

"Despite reports to the contrary I'm still on extremely good terms with my friend Nicolas Sarkozy," says the PM. He won't be drawn on any discussion of the imminent French presidential election.

Alex Cunningham, Labour, wants to know what Mr Cameron will be doing on his days off when other EU leaders are working on the future of Europe. The prime minister says he will be trying to sort out "the mess" he inherited from the previous Labour government.

Conservative Backbencher Ann Main asks the referendum question but is brushed aside by David Cameron.

Another mention of Mr Miliband's aides - who have told the BBC and other members of the press that the Labour leader also would not have signed the treaty. This time when the camera turns to Mr Miliband he is impassive - arms folded.

It is now clear that Nick Clegg's non-appearance will dominate the coverage of this statement. After yet another question from the Labour benches an exasperated prime minister says he is not responsible for his whereabouts but once again makes it clear that Nick Clegg signed up to the negotiating position. It looks like Mr Clegg has possibly caused rather than avoided a distraction.

A Conservative MP says he's heard from aides outside the Commons that Ed Miliband's position is that he wouldn't have signed the EU treaty. The camera cuts to Mr Miliband who seems to look puzzled. The Speaker declines to give the Labour leader the opportunity to come back to the dispatch box and clarify.

Liberal Democrat Bob Russell offers some "grandfatherly advice", urging the prime minister not to adopt the "Carlos Tevez approach" to negotiation. The prime minister says he will give some thought to the advice, which alludes to the Manchester City striker who has walked away from his team.

David Cameron and George Osborne were not too impressed by one of the Labour leader's comments.

Yet another Labour MP - this time Kevin Brennan - asks where Nick Clegg is. A slightly exasperated prime minister says: "I'm not responsible for his whereabouts but I'm sure he's working very hard." His words are greeted with laughter.

Gregg McClymont, Labour, asks whether the veto will impact badly on jobs and businesses in the UK. Mr Cameron says he can reassure the House that it won't - and lists why the UK is still a much better bet for investors that other EU countries.

Does the prime minister know the whereabouts of the deputy prime minister and will their tiff lead to a split, Labour's Chris Ruane asks. The reply is one word: "No". But was that no to the first or the second element of the question? Or both?

Labour MP Barry Sheerman asks whether the manufacturing sector and other services will be defended in the same way as financial services. Mr Cameron says the key is the single market and that is what the government is determined to safeguard.

In response to Labour MPs shouting at the prime minister, "where's Clegg?" Tory MPs shouted at the Labour leader, "Would you have signed?" Ed Miliband did not give his answer but his aides just have. It's "No". The longer answer, they say, is that Miliband would have stayed in the room and negotiated a better deal.

Lib Dem Greg Mulholland asks about the strength of the coalition - Mr Cameron thanks him for his question and says the coalition is strong and united in the need to get the UK growing again.

Labour's Wayne David asks whether it's true that the deputy prime minister is not in the chamber because he didn't want to be a distraction. He doesn't get a direct reply.

"There has been an empty seat at the table ever since we didn't join the euro," says Conservative Gavin Barwell. Mr Cameron says he's agrees that's what fundamentally changed the UK's relations with Europe - not last week's veto.

A recurring gag from Tory Peter Bone - who always brings up his wife. Mrs Bone greatly approves of the veto, the MP says. Mr Cameron says he's grateful for her support.

Here's a glimpse of what can face you across the divide in the Commons.

First supportive comment for the PM from the Labour benches by Kate Hoey, which underlines the fact that there are Eurosceptics on the oppositon benches too.

"I'm afraid that 'I told you so' isn't an economic policy," says the PM, to a question about whether he'll point out the inevitability of the eurozone crisis to his European colleagues. Mr Cameron says the UK should instead be "working constructively".

Kate Hoey, Labour MP for Vauxhall, says many in her party, as in the country, agreed with the decision taken by the prime minister, as many sat around her shake their heads.

PM says anti-EU MP Philip Davies' denunciation of the Conservatives' coalition partners as '"lickspittle euro fanatics" goes "a little too far". So they're all getting on famously, then...

Stewart Hosie, of the SNP, asks how the prime minister will explain to Cardiff, Edinburgh and Belfast that adopting an "isolationist policy" is anything other than "dangerous". In his response, Mr Cameron says his government has worked hard to work with other administrations.

There are possibilities and opportunities for rebalancing power in Europe, says Mr Cameron. It's not "repatriation", but it is one "re" word to offer some comfort to Conservative Eurosceptics.

The body language of the pro-Europeans on the government front bench is telling. Ken Clarke has spent much of the statement with his arms firmly crossed. Chris Huhne sat with his head tilted back, rarely looking directly at the prime minister. Their obvious discomfort increased as one lifelong Eurosceptic rebel after another - Messrs Redwood, Lilley, Cash, Jenkin and Rossinfell - jumped to their feet to congratulate their leader. The thing about the Europe debate is that it is as much about emotion as it is about analysis. Eurosceptics see a proposal from Brussels and know they want it vetoed. Pro-Europeans look at Eurosceptics applauding the PM and know they're opposed to what he did.

Clive Efford, Labour, asks something many have asked - what safeguards are in place now for the City that weren't there last week? Mr Cameron says the main safeguard is that the UK didn't sign up for treaty change.

The prime minister says the same people who wanted to join the euro are the ones who are criticising his decision last week. "It's the same arguments from the same people. They were wrong then and they're wrong now," he tells MPs.

First totally hostile Lib Dem question to the PM - Jo Swinson accuses him of "rushing for the exit" rather than negotiating constructively.

Speaker John Bercow has had a busy afternoon in which he has repeatedly called for order, brevity and a reduction in noise levels.

Mr Cameron says that when the UK refused to join the euro everyone feared the City would lose out to Frankfurt - just as they're voicing those sorts of concerns now. "It was scaremongering then and it's scaremongering now," says the PM.

Mr Cameron develops his idea, alluded to earlier, that the EU should be viewed as a network rather than a block in response to a question from a fellow Conservative. He says it is right that the UK should want to be part of some networks over others.

Labour's Frank Dobson asks about the threat to British banks from a eurozone collapse. Mr Cameron says the government will do all it can to prevent such a collapse.

The few Conservative europhiles have so far been silent, but Nicholas Soames raises - subtly - the concerns of businesses over last week's events in Brussels.

Elfyn Llwyd, Plaid, Westminster Leader, accuses the prime minister of believing that only one square mile of the UK is important i.e. the City. Mr Cameron says the financial sector affects much more than just that small area - and jobs in many other areas depend. The PM ignores the second element of Mr Llwyd's question - a dig about Nick Clegg.

Mark Pritchard - the secretary of the Conservatives backbench club the 1922 committee - has a pop at coalition partners the Lib Dems for failing to realise that Euroscepticism is popular. His is followed by a more pointed attack from the Tory benches - Nadine Dorries calls some in Nick Clegg's party "cowardly".

The prime minister has repeatedly referred to the previous Labour government's handling of financial regulation, which has been criticised in a Financial Services Authority report. You can read more about this in our BBC News website story.

Jacob Rees-Mogg, Conservative, says Mr Cameron's actions are to be "wonderfully commended" and the PM was the toast of his Somerset constituency.

The first truly critical question from the Lib Dems. Martin Horwood believes the City could be at more risk now.

Some debate in the press gallery as to whether 'plonker' is suitable Parliamentary language.

Green party leader Caroline Lucas asks why Mr Cameron acts as if the interests of the City are synonymous with the UK's interests which, she says, they are not. In reply, Mr Cameron insists his action wasn't about "special protection" for finance.

First mention of a referendum - it's taken a while. Mr Cameron says he'd been waiting for that to come up. He says there is not going to be any further transfer of powers to Brussels so a referendum isn't needed.

As a parting shot, Mr Skinner calls Mr Cameron a "plonker", to peels of laughter around the chamber.

Denis Skinner, Labour, links this current row to the ongoing dispute over public sector pensions. He asks whether is Mr Cameron the same prime minister who has been urging people to stay in meetings and talk? Mr Cameron says at no stage did he walk out of any meetings.

Mr Meacher accuses the PM of acting solely on behalf of the City - but Mr Cameron rejects this picture and turns the tables on Labour, referring to a report on the collapse of Royal Banks of Scotland which today criticised light-touch regulation under the last government.

Michael Meacher, Labour MP for Oldham West and Royton, says Mr Cameron has thrown away the UK's influence from Beijing to Washington. "Never before has so much been thrown away for so little," he says.

Andrew Rosindell, Conservative MP for Romford, thanks Mr Cameron for displaying the "bulldog spirit" in Brussels last week.

"We have both put aside our interests in the national interest," says Mr Cameron in response to a question about splits within the coalition over Europe. He says Lib Dems and Tories are working together towards the "common good".

Another Tory Eurosceptic Bernard Jenkin says he wants to remind the Labour benches - and the BBC - that the prime minister has the support of not just the Conservatives, but the British people.

Laughter not confined to Labour benches when the PM says he is grateful for the support of Bill Cash -one of the Conservatives best known Euroscpetics.

The speaker is repeatedly appealing for brevity from MPs asking questions.

Labour MP Stuart Bell asks why the UK didn't help with the Greek bailout if we care so much about the rest of Europe. Mr Cameron says he can't possibly agree that giving money to Greece would have been the right thing to do - but Ireland is a special case so the UK did help there.

Sir Menzies Campbell congratulated David Cameron on his "unequivocal statement" backing the benefits of EU membership but asked him to spread that message to his own supporters. Sir Menzies might have been expected to be rather more critical if, that is, he hadn't been asked by Team Clegg to take the airwaves on Friday morning to greet the deal as "inevitable".

Chris Bryant, Labour MP for Rhondda, says Mr Cameron "surrendered to his backbenchers" and asks whether the prime minister is ashamed of himself.

Communities Secretary Eric Pickles, unable to get a seat on the floor of the House, has appeared in the gallery upstairs alongside observers from the House of Lords. I am sure he thinks it would be premature to join the peers permanently!

Mr Cameron says his job in government is to protect and defend the national interests at all times, and that's what he feels did.

David Cameron's speech was clearly written to reassure pro Europeans, but when he declared "We are in the EU and want to be" Labour MPs pointed and laughed at the silent Conservative benches.

Noteworthy that Eurosceptic John Redwood gives the PM strong backing having previously pushed for a more radical rewriting of the UK's relationship wiith Europe - and, ultimately, a referendum.

"I did exactly what I said I was going to do but, apparently, in politics that's surprising these days," the prime minister tells MPs. He means that he promised he wouldn't sign any agreement he wasn't happy with - and didn't.

Mr MacShane also says Britain is now "ideologically fused to the notion of isolation".

Former Europe minister Denis MacShane says the perception around the world is that the UK has committed "a diplomatic catastrophe" - and asks if the PM will take Nick Clegg with him to all future EU negotiations. Mr Cameron conveniently ignores that question.

Margaret Hodge, Labour MP for Barking, says Mr Cameron either didn't prepare properly or went to the talks with the intention of using his veto.

The PM is barracked when he accuses the former foreign secretary David Miliband of naivety. So far two thirds of Labour contributions have come from members of the same family.

Former Liberal Democrat leader Sir Menzies Campbell wants to know what practical steps could now be taken by the UK to help solve the eurozone crisis. Mr Cameron assures him the UK will be working hard to do just that and lists a series of diplomatic steps.

Labour's David Miliband asks the PM to confirm whether the UK has ever lost a significant vote in Europe on financial regulation - and asks why we couldn't keep winning them in the future. The prime minister says Mr Miliband is "very naive about what's happening in Europe over financial services". He says the UK is constantly facing threats of "frankly discriminatory legislation" from Brussels.

Sir Malcolm Rifkind, Conservative MP for Kensington, also criticises the Labour leader's refusal to say whether he would have backed the treaty.

Former Labour foreign secretary Jack Straw demands to know exactly which paragraphs of the proposal put to David Cameron in Brussels were threatening to the UK.

Veteran MP Sir Peter Tapsell gets away from domestic politics and questions whether what was agreed in Brussels really will bolster the euro.

Ed Miliband in full flow.

"Just because you are in opposition, doesn't mean you should oppose British interests," says the prime minister. He says the Labour leader should have the courage to state whether he would have backed the treaty or not.

The prime minister says Labour simply "goes along with what others want".

Uproar in the house with Conservative MPs chanting "answer" at the Labour leader over whether he would have signed a new EU treaty.

The noise level in the chamber reaches new deafening heights when the PM hits back at Mr Miliband - he says the Labour leader talked for 15 minutes and still didn't tell the House whether he was for or against a reworked EU treaty.

The prime minister's decision was "bad for business and bad for the country", concludes the Labour leader to cheers from his MPs.

The prime minister's actions, and the "bad deal" they left the UK with, means the country will be on "the sidelines" for years to come, says Mr Miliband.

Lib Dem MP Tom Brake gives up his seat for former party leader Ming Campbell so he is likely to intervene in this debate.

Mr Miliband asks: Why didn't the prime minister seek a deal with the Swedes, Poles, Dutch?

Europhile Conservative Lord Heseltine has now become a hero of the Labour benches! Order papers waved by Labour MPs when Ed Miliband says the PM was defeated in Europe.

It's not a veto when the action you tried to stop goes ahead without you, says the Labour leader. He says that's called "losing" - to noisy cheers from his party's MPs.

Uproar on both sides of the chamber when Mr Miliband quotes pro-European Conservative grandee Lord Heseltine.

Downing St said the PM would be measured and not triumphialist and in fact, he stressed Britain's engagement with Europe - something perhaps designed to appeal to the Lib Dem part of the coalition. However, the Lib Dem leader was not there to hear it.

The Labour leader says the prime minister has "left us without a voice".

Mr Miliband, the Labour leader, says the prime minister has failed to prove there was any threat to the UK's financial services. He adds that Mr Cameron has failed to establish any extra protections for the industry anyway.

Ed Miliband now takes centre stage. He begins by pointing out the absence of Deputy Prime Minister Nick Clegg. He then says Mr Cameron returned from EU talks with "a bad deal".

Mr Cameron says there is not a binary choice. It is possible to be a full, committed member of the EU without participating in every decision.

Nick Clegg decided, I'm told, that his presence in the Chamber would be a distraction. Taking the pro European seats on the front bench are Ken Clarke - who I'm told had an important phone conversation with the prime minister over the weekend - and Vince Cable - who used last Monday's cabinet to warn against a negotiating position based on protecting the City.

The speaker interrupts Mr Cameron again and tells the opposition front bench to conduct themselves with a degree of "reserve".

IMF resources are for countries not currencies, says the PM. The UK supports giving the International Monetary Fund more cash, but not just so it can effectively create a eurozone bailout fund, he adds.

If Britain had agreed to a treaty change, it would not have had proper protection, the prime minister tells the Commons.

MPs are told Mr Cameron believes in an EU with the "flexibility of a network" rather than "the rigidity of a block".

Over the weekend Lib Dem aides said Nick Clegg would have no difficulty sitting beside the PM and was used to having every facial expression analysed. In fact, the PM is flanked by George Osborne and Leader of the House Sir George Young hence Labour MPs asking about the DPM's whereabouts.

Mr Cameron restates what he's said many times before - while he is in Downing Street the UK will never join the single currency.

The prime minister says the UK remains a member of the EU and that membership gives the UK "a strong voice on the global stage". "We are in the European Union and we want to be", he says.

As the debate kicked off, Labour MPs shouted "Where's Clegg?" We still haven't spotted the deputy PM in the chamber.

Mr Cameron says the choice was a "treaty without proper safeguards or no treaty". He says the right answer was no treaty.

Howls of derision from the Labour side when the PM says he was genuinely seeking a deal. He is also keen to stress that the financial services sector isn't limited to the City of London.

Chancellor George Osborne, seated to the prime minister's left, nods, smiles and points at Labour's front bench as Mr Cameron speaks.

"We were simply asking for a level playing field," says Mr Cameron. He says denies that the government is "going soft on the banks".

David Cameron, with his chancellor at his left hand.

Mr Cameron says he went to Brussels genuinely looking for an agreement and what the UK asked for was "modest, reasonable and relevant".

A raucous atmosphere forces Mr Cameron to sit briefly while the speaker calls for order.

Speaker John Bercow interrupts the PM to silence jeering MPs.

Mr Cameron says he went to the EU summit to protect Britain's interests.

It's very nearly standing room only on the government side - Justice Secretary Ken Clarke got a place on the front bench in good time

David Cameron is now on his feet to address a packed House of Commons.

Wales's first minister Carwyn Jones is writing to David Cameron to voice objections about the prime minister's use of the veto at the EU leaders' summit.

What we've been hearing from government sources is language about engaging constructively and engaging positively with Europe. What we haven't been hearing are any of the 're' words; repatriate, renegotiate or redefine our relationship with Europe. And my sense is that there is a concerted attempt to just dampen things down a bit.

Over in the Commons the green benches are filling up in eager anticipation of the prime minister's appearance.

Ahead of the Commons debate, it's worth considering the UK's position in Europe. While the UK wielded its veto, another three non-eurozone countries have expressed reservations about the EU summit deal. Three correspondents consider what lies ahead for Hungary, Sweden and the Czech Republic who, despite having all agreed to consider taking part in the "fiscal compact" to save the eurozone, show no clear sign yet that they will sign up.

Polls over the weekend seemed to show the public were pretty keen David Cameron's veto. A Populus survey of 1,951 adults for the Times found that 57% felt he was right to do it while only 14% disagreed with the move. Meanwhile, a Survation poll of 1,020 for The Mail on Sunday suggested the PM had the support of 62% of the public - while only 19% were against him.

Labour are urging Lib Dem MPs to work with them to "get a better outcome" for the UK in Europe. Writing on the New Statesman website, shadow foreign secretary Douglas Alexander accuses David Cameron of putting party before national interest and says Labour and the Lib Dems must show "serious statesmanship" to avoid the UK being marginalised.

The BBC has been told that the House of Commons authorities are preparing for a rowdy session this afternoon. Sources in the Commons said the Serjeant at Arms' Office has been told that the Speaker could be forced to expel some MPs if they behave improperly or refuse to retract unparliamentary language. As such, extra officials have been drafted in to stand by and be ready to accompany MPs out of the building if they are - to use the parliamentary jargon - "named" by the Speaker.

Strong words from Conservative MP Julian Lewis. He tells Sky News he fears Europe is moving towards a single economic government and this will pose a "danger to peace and stability in Europe in the long term" as it will erode democracy. Just in case anyone doubts where he stands, Mr Lewis is wearing a pound sterling badge on the lapel of his jacket.

Before David Cameron gets started in the Commons, Theresa May will be answering Home Office questions. That will start just after 1430 GMT.

Friday's deal did little to help the euro, Conservative MP John Redwood suggests. Using a medical metaphor, he says the single currency needed urgent "treatment and medicine" but, instead, the EU leaders spent their time talking about "building a hospital".

Lib Dem MP Martin Horwood suggests his party leader Nick Clegg should play a more substantial role in future EU negotiations as he has "very good relations" with European leaders. "We need to play to that kind of strength to repair the damage that has been done," he tells the BBC News Channel.

An update on what we can expect later in the Commons. David Cameron's statement, Ed Miliband's response and contributions from backbenchers are likely to last about 90 minutes. The Commons Speaker has decided proceedings will wrap up at about 1700 GMT, when there will be a statement on RBS by Treasury minister Mark Hoban. In practice, what this means is that not all MPs who want to speak will have an opportunity to do so.

William Hill says they have cut their odds on there being a general election next year in the wake of tensions between the Conservatives and the Lib Dems over Europe. The bookmakers say they have taken a string of bets on there being a snap poll next year. But Conservative backbencher David Davis tells the BBC he believes an election is unlikely as the two parties want to focus on the urgent economic problems facing the country.

Some interesting thoughts from leading French politician Francois Hollande, the Socialist Party challenger to President Nicolas Sarkozy in next year's election. He says Friday's agreement was the "wrong answer" and, if elected, he would renegotiate the deal to give greater powers to the European Central Bank to intervene to support markets.

If you're just joining us, try reading our simple guide to the EU deal on the debt crisis for context ahead of the prime minister's statement in the Commons later.

One of the UK's top businessmen, Sir Martin Sorrell, has questioned David Cameron's veto move, saying it could give the impression "the UK is outside Western Europe". The chief executive of advertising firm WPP told the BBC's Daily Politics that it's "much better to be inside working with the powers that be than outside".

Former EU Commissioner and Conservative cabinet minister Lord Brittan says the UK will need to "mend some fences" with its EU partners. He tells the BBC's World at One that the UK was not in a "good position" and would now have to "repair relationships". It would be wrong for the UK to object to other countries using EU institutions to pursue closer integration, he adds, as this would be seen as a "hostile and aggressive act".

Conservative MP David Davis tells BBC Radio 4's World at One programme that the UK should aim to forge a relationship with the EU which allows protection not only for the City of London but for other industries and aspects of the British way of life. "The simple truth is that we will have to make some arguments about repatriation," he says.

says: The prime minister's task this afternoon is two-fold. One is to try to smooth some ruffled feathers on the Liberal Democrat benches. I'm told that Nick Clegg has been closely involved in the preparation of his statement. At the same time the prime minister also has to manage expectations on his own benches. I'm told meetings are taking place to make sure that MPs are told 'we don't want triumphalism, we don't want over the top statements. We just want realism and pragmatism'. That's his task. I'm told the prime minister wants to be firm but not incendiary. It's clearly going to be a tough afternoon.

In the New Statesman, Mehdi Hasan asks: "What is the point of the Liberal Democrats?" He accuses the party of sacrificing its "distinctive beliefs and principles" while receiving "little in return".

To put the UK's position into context, check out our guide to the stance taken by the 27 members of the EU over the Euro.

"Plenty of British prime ministers have vetoed things," says London Mayor Boris Johnson, arguing this isn't a "unique moment". He also rejects suggestions that the City of London or the UK will be "punished" for its stance. On the subject of the coalition, Mr Johnson says that as he understands it, "David Cameron's position was fully supported by the Liberal Democrats".

French President Nicolas Sarkozy admits that the EU is now a two-speed alliance but insists that Britain will not be marginalised. "There are now clearly two Europes," he tells French daily Le Monde. And, asked whether Britain could still remain inside the EU single market, Sarkozy adds: "We need Great Britain. We'd be greatly impoverished if we allowed its departure which, luckily, is not on the agenda."

The BBC's Europe editor Gavin Hewitt believes Britain "may yet find it can attract refugees from the eurozone to its banner". In his latest blog, he says: "Across Europe, there are fears that Germany is becoming too powerful and Britain could yet be seen as a counterbalance to Germany's growing influence."

How will the euro crisis end? Here are some possible scenarios mapped out in an interactive feature on the BBC News website.

"Nick Clegg has shown once again he has no bottom line and no principles. His public anger is matched only by his private acquiescence," says Labour's deputy leader Harriet Harman. She adds that, despite expressing disappointment about the veto, he remains deputy prime minister in a government which he believes has taken an action which is "damaging for Britain in the longer term".

EU Economic affairs commissioner Olli Rehn expresses "regret" over David Cameron's decision not to sign up to a new EU treaty on fiscal and economic integration. He tells a press conference: "I regret it not only for the sake of Europe as for the sake of British citizens."

Conservative Eurosceptic Bernard Jenkin says Lib Dems are "in a very difficult position". The MP for Harwich and North Essex tells the BBC: "Most of their voters are much less enthusiastic about Europe than the Liberal Democrats themselves. They must be looking at the opinion polls, seeing how much support the prime minister has got in the opinion polls for what he has done, and I would've thought most Liberal Democrat MPs will not want to campaign against what is a popular policy and also in the national interest."

Former Lib Dem leader Sir Menzies Campbell tells BBC2's Daily Politics it's "ridiculous" of Labour to suggest that David Cameron "deliberately walked into the negotiations without a friend" anywhere in Europe. In having his demands refused, the PM paid the price for the last 20 years during which time "we have appeared not to be fully engaged" in the EU, Sir Menzies adds.

My sense is that Downing Street is just trying to dampen things down and take the heat out of this. And I think we'll hear more of that when David Cameron addresses MPs this afternoon. I don't think we will see any triumphalism whatsoever.

Over in Brussels, Olli Rehn, European commissioner for economic affairs, tells a press conference it's too early to say if the accord agreed last week will be enough to fix the eurozone's problems. He says we should have a clearer idea by early January, adding that he is disappointed that not all EU members signed up to the new fiscal arrangements.

On comments from Deputy Prime Minister Nick Clegg yesterday, David Cameron's spokesman said: "Things happen that you don't anticipate - that's the nature of coalition government."

A few lines just in from Downing Street. The prime minister's official spokesman says the government will seek to "engage constructively" with other EU countries in the wake of last week's summit. He says it will also continue to press for safeguards for the City.

Amid all the talk of Europe, there is more bad news for the UK economy. Economists at Standard Chartered bank have issused a gloomy forecast for 2012, predicting a contraction of 1.3% - having previously predicted growth of 0.6%. Mind you, they say things will be worse in the eurozone - with a contraction of 1.5%.

The Spectator's web editor Peter Hoskin describes this as one of the most tense periods for the coalition government. "The Lib Dems are, basically, scared of annihilation," he writes. "They have gained much from the coalition, both in terms of policy and of experience, but it is now coming at some cost to their self-identity. Europe, voting reform, tuition fees - these are all core Lib Dem concerns, but they are also the areas where they have, very publicly, lost out to the Tories."

UK Independence Party leader Nigel Farage says the real debate about the UK's membership of the EU is now starting. Despite David Cameron's insistence he used the veto to protect the finance sector, Mr Farage says "the City of London now faces retribution as a result of Cameron's veto and every step must be taken to protect it from these attacks".

"Businesses are now desperate to hear a positive statement from Mr Cameron about how the UK's position in the single market can somehow be buttressed," writes BBC business editor Robert Peston in his latest blog entry. He says many business leaders are "profoundly uneasy" about the decision taken by the prime minister.

Scotland First Minister Alex Salmond accuses the prime minister of "blundering" into altering the UK's relationship with the EU, in a letter to Mr Cameron. He says the decision could have implications for the relationship between Scotland, Wales and Northern Ireland and their European neighbours. In his letter, Mr Salmond poses six "crucial questions" about the veto, such as what risk assessment, if any, did the UK government carry out on its impact on investment into Scotland.

German newspaper Der Spiegel says Chancellor Angela Merkel "wants to prevent Britain and the eurozone from drifting further and further apart", and feels it's important "to give the British the feeling that they are still part of Europe". But the paper believes the French feel differently, "hoping that they will carry more weight in a union that does not include Britain".

tells the BBC's John Humphrys on Radio 4's Today programme that David Cameron's use of the veto in EU negotiations was "the first veto in history not to stop something... It was a phantom veto." Listen here.

"We simply cannot defend Britain's national interests in an empty room," argues shadow foreign secretary Douglas Alexander. He says his party leader, Ed Miliband, will use the Commons debate to ask the prime minister what, if anything, has been achieved by his veto. He says Labour would have been better at building alliances.

The Economist asks whether David Cameron could have done anything other than walk away from a new EU treaty.

All eyes might be on Europe, but this morning David Cameron is also looking further afield, welcoming the King of Bahrain Hamad Al-Khalifa to Downing Street.

Michael Fallon, Conservative deputy chairman, says his party will be "reassuring" their Liberal Democrat partners that Britain will remain a full member of the EU.

Not all Liberal Democrats have criticised Mr Cameron's decision. The former chief secretary to the Treasury, David Laws, blames French "villains" for putting the prime minister in a difficult position. "It seems as if many of the other eurozone nations didn't really understand Britain's negotiation position, and it seems to many of us that France took a deliberate decision to ignore the quite reasonable demands of the UK and perhaps actively seek to exclude the UK from the core of European Union countries," he says.

Conservative Justice Secretary Ken Clarke is known for voicing his enthusiasm for Europe, but as he left home a short time ago, he didn't say very much at all. "Wait for the prime minister's statement this afternoon" was all he would offer.

Nick Clegg is "blinded by a fanatical obsession with the EU", argues Simon Heffer in the Daily Mail.

In his latest blog entry, BBC political editor Nick Robinson says Nick Clegg's switch from defending the prime minister's negotiating stance to expressing his bitter disappointment in just two days appears to be a reaction to "the crowing of Tory Eurosceptics and the Tory press about the use of the veto, and the anger that it produced in his own party".

What does the rest of Europe make of the UK move? Well, Peter Altmeier, a senior member of German Chancellor Angela Merkel's CDU party, tells the BBC he's "pretty much certain this is just one example" of David Cameron going it alone "and better examples of cooperation will follow". He says the UK made demands in Brussels which were "so far going" they simply couldn't be agreed, and points out that many other countries have asked for exemptions to things - the French on agriculture for example - "that the UK would never agree".

Writing in the Independent, Andrew Grice argues that the problem faced by Mr Cameron is that Conservative Eurosceptics are "never satisfied". "Although they don't admit it, the hardliners see his veto as just the start of a process leading to Britain's EU exit," he writes.

The prime minister says his decision was designed to protect Britain's financial services. But is the City actually worse off after veto? The BBC's Joe Lynam considers this question.

Unlike his colleague Mr Cable, the deputy prime wasn't in a chatting mood when he left home this morning.

Speaking outside his home a short time ago, Business Secretary Vince Cable says: "What we badly need is complete reassurance that we are fully committed to working in the European Union." He says "millions of British jobs depend on it", including his own.

There's been a noticeable hardening in Nick Clegg's language, in part because many senior Liberal Democrats have got up and said, 'We are not happy with this.' We've had Lord Ashdown, Lord Oakeshott and Baroness Tonge all expressing disquiet. So, in a way, he's having to respond to pressure within his own party. But I think there's also an element in which he feels he's got to push back against what he fears will now be a move by the Eurosceptics to press ahead with a much harder agenda. So in a way it's a bit like if you have noisy neighbours making your life a misery, then you turn up the volume to make their life a misery too.

As they have been all weekend, the papers are split down the middle on this issue. The Guardian is worried about the big picture, fearing the summit did little to actually help the eurozone crisis. It says there are two choices - get the Germans to agree to a common European Treasury in the form of the European Central Bank - or break up the euro. The Daily Telegraph, meanwhile, focuses on fallout closer to home, accusing Nick Clegg of retreating into "Euro fantasy land". It says he wanted "to let off steam for the benefit of his troops" but struggles to understand why "when ordinary Britons have so little sympathy for dogmatic Europhilia".

This has become a domestic political issue for David Cameron - as well as a Europe-wide one - because his own deputy, Nick Clegg, is unhappy. In this BBC interview, Mr Clegg speaks of his "bitter disappointment" at the outcome of last week's EU talks. In it, he says the decision was "bad for Britain".

You can find out more about David Cameron's veto on a EU-wide treaty by reading our guide to his decision and its ramifications.

For those of you who aren't familiar with the background to Mr Cameron's appearance later, it comes after he blocked changes to the EU's Lisbon Treaty - which had been aimed at addressing the euro crisis and preventing a repeat in the future - at a summit in Brussels on Friday.

Hello and welcome to our live page on the fallout from David Cameron's decision to veto EU treaty changes. We'll provide updates and analysis as the prime minister prepares to face MPs in the Commons to explain his actions.