Eurosceptics triumph at EU summit

The outcome of the failure of the EU summit to reach agreement as 27 was a triumph for the Eurosceptics, but it also showed up Britain's two top Conservatives - prime minister David Cameron and his undeclared rival London mayor Boris Johnson - as what my father - himself an old Etonian - would have called 'spivs'.

Cameron said the sticking point was the interests of the London financial sector, which has ripped off British taxpayers and stripped savers of their assets.

What sharp City practices was Cameron trying to shield from the proper scrutiny which financial services in Frankfurt or Paris were prepared to yield to? Paying lip service to Europe's single market - which is of such value to the rest of the real British economy - while making bumps in the level playing field is simply ridiculous.

Cameron and his rival Johnson are doing what the 'jobs for the boys' Tories have done so often: protect their rich friends.

The truth seems to be that during the EU summit in Brussels, European commission president José Manuel Barroso offered the UK a declaration on the level playing field in the single market. Cameron refused that, and demanded a UK protocol derogating from the single market on financial services. That would have been a breach of EU law and was for that reason rejected.

Now the eurozone countries, plus several others, will form a fiscal union with enhanced 'stabilisation tools' to steady the euro. But once again, Britain has thrown down the gauntlet by demanding that this process must be developed through and using the existing EU institutions, thus providing further veto opportunities, which foreign secretary William Hague made clear in a BBC interview.

Johnson has been upping the ante in recent days, criticising the EU as undemocratic and effectively dancing to Berlin's tune. As the europhobic Daily Mail said today, "You have to hand it to Boris, disorganised and unpredictable he might be, but he's not exactly a silent assassin.

"His intervention in the euro debate – 'We are in danger of saving the cancer and not the patient' – was as loud and bold an announcement of a party leadership campaign as you are ever likely to see. A man who has built a career on ruthless opportunism is preparing for the moment to move against David Cameron."

When Johnson began taunting Cameron over Europe - initially over Cameron's refusal to hold a referendum of the Lisbon treaty - his intentions were clear: to use the content-free platform of London's city hall to mount a comeback into national politics. A former Daily Telegraph journalist, who made his name writing highly-coloured and often inaccurate copy from Brussels, Johnson was a gaffe-prone spokesman in opposition.

During my long dispute with Cameron over his controversial new EU grouping with what Nick Clegg called 'a bunch of nutters, homophobes, anti-Semites and climate-change deniers' - the Economist described it as "a shoddy, shaming alliance". I found myself in the office of Eric Pickles MP, then Conservative party chairman and pride of place was a photograph of Cameron and Johnson with hands clasped taking a bow after Johnson's mayoral win. The point of the picture was that both men were holding raised hands but deliberately turning away from each other: the body language was unmistakeable.

Cameron's cardinal mistake was to give in to a posse of 'Better off out' parliamentarians during the 2005 Conservative leadership contest, and promising to leave the European Peoples' Party, the family of German chancellor Angela Merkel and French president Nicolas Sarkozy.

Today, Cameron has one political ally - Czech premier Petr Necas. By contrast, Clegg's European family shares power in half the EU countries and enjoys, for example, eight EU commissioners, one of them, Olli Rehn, who will become the effective finance minister of the new eurozone.

The outcome of the failed talks will be blamed on Cameron and the UK, disguising the actual failure of Merkel and Sarkozy to agree on a robust package going beyond budget discipline. The European Central Bank - unlike the wider economic remit of the US federal reserve - is controlling inflation only.

There is no doubt that the British are increasingly eurosceptic. As a longstanding pro-European I regret that. Like the Conservative party I joined in 1967, I am an internationalist and want Britain to lead in Europe - not leave Europe.

The Conservative party is now a nationalist party but is not acting in the national interest, but in the interest of a privileged minority from which Cameron and Johnson are drawn. That this personal rivalry should now imperil the survival of the euro and the single market is outrageous. Cameron must face down the europhobes or the coalition will dissolve, but that is possibly his intention, so as to win a Union Jack election and govern without the moderating influence - not just on Europe - which the Liberal Democrats provide.