British Prime Minister David Cameron said he had little choice but to veto a new European Union treaty after the EU rejected "modest" safeguards for Britain's financial services industry, as he sought to defend a decision that has been greeted well by many voters but caused anger across Europe.
Mr. Cameron said that the U.K. remains an active part of the European Union and said last week's vote does not change that, dismissing recent talk that his action heralded Britain's eventual departure from the EU.
"I went to Brussels with one objective to protect Britain's national interest and that is what I did," Mr. Cameron told a packed Parliament.
Mr. Cameron refused last week to include the U.K. in a new treaty that would create more EU integration for members using the euro, leaving the rest of the EU to plow ahead on its own.
Critics have said that the veto leaves the U.K. isolated in Europe and point out that last week's treaty wouldn't have subjected the U.K. to any more financial regulation or any fiscal integration with the rest of the EU. Instead, it was about approving the use of an existing treaty to allow greater fiscal integration for members of the euro zone, which the U.K. isn't part of.
Mr. Cameron's veto has also caused anger among his Liberal Democrat coalition colleagues. On Monday, deputy Prime Minister Nick Clegg didn't take his usual place next to Mr. Cameron as he made his statement.
The Prime Minister said that any new agreement could have cut across current treaties and so undermined existing legislation that is in Britain's interest. Mr. Cameron said he asked for "modest, reasonable and relevant" safeguards for the financial services industry to balance out the increased power a new treaty would have given the euro zone.
"A treaty outside the European Union cannot do anything that cuts across the European union," he said.
Mr. Cameron dismissed suggestions that his veto has cut the country adrift from Europe, saying Britain will still take a leading role in the EU on issues that matter to it, such as enlargement and the single market.
His signaling strong commitment to the EU may disappoint many of the 'euro skeptic' members of his Conservative Party who cheered the Prime Minister in Parliament but who want the veto to be the start, not the end, of a process of distancing Britain from Europe.
A poll published in the Times newspaper Monday showed that Mr. Cameron has some public backing, with 57% saying he was right to veto the 27-nation deal. Still, 56% said it would reduce the U.K.'s influence in the EU.
Mr. Cameron's price for signing that treaty was a list of safeguards to protect Britain's large financial-services industry from future regulation including demands that future transfers of power from a national regulator to an EU regulator on financial services would be subject to a veto and a promise that the European Banking Authority is kept in London after recent suggestions it would be moved. The Europeans complained that Mr. Cameron was trying to get leverage out of the EU during its time of crisis.
Some U.K. based bankers are now worried that the ill-will created by Mr. Cameron's stance means the U.K. won't have a seat at the table "the next time financial regulations are negotiated under existing rules.
Ed Miliband, the leader of the opposition Labour Party, asked Mr. Cameron what had been under threat for finance in last week's negotiations.
"There is nothing worse for financial services than the outcome he secured," he said.
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