David Cameron strikes 'positive' note at EU summit

David Cameron has vowed to work "positively" with the EU but to protect UK sovereignty, after a breakfast meeting with European Commission president Jose Manuel Barroso.

The two men were meeting ahead of Mr Cameron's first EU summit in Brussels.

It comes amid efforts to restore the credibility and stability of the euro.

The prime minister is expected to reject proposals for new EU powers to scrutinise national budgets before they are presented to MPs.

The summit is discussing progress of a "task force" on economic rules and surveillance headed by EU Council President Herman Van Rompuy.

'Growth and confidence'

Mr Cameron is expected to argue that the proposed new budget powers should be restricted to the 16 eurozone countries, but with no final decisions due until October he will be hoping to avoid a confrontation, focusing instead on establising positive relations with other EU countries.

At a joint press conference with Mr Barroso, he stressed that the UK was fully behind plans for better coordination of national efforts to get budget deficits and debt down and boost growth.

"We know how important it is that there is in Europe growth and confidence," he told a joint press conference with Mr Barroso.

"What is really important is to get the European economy motoring again."

He vowed that Britiain would play a "very positive, a very engaged, a very active role in the European Union and at this European Council," but added "we of course always defend our national interests as others do, and our national red lines".

He praised Mr Barroso's call for EU leaders to concentrate on economic "substance" rather than institutional reform at this summit as "music to my ears".

Eurosceptic Conservative MEP Daniel Hannan urged Mr Cameron to resist any efforts to impose tighter restrictions on Britain's financial services industry.

He told BBC Radio 4's Today programme the prime minister had to "be prepared to be bloody" to defend the City of London, as it was Britain's best hope of promoting growth.

"We have to be prepared to do what the Italians are now doing, when they have been told to change their rules on media ownership, what the French did when they were told to admit British beef products, to say 'gentleman, we are simply not going to do this'."

If Britain was fined as a consequence of refusing to adopt new rules, the 260 million euro levy could be split up among the affected City institutions and called a fee, suggested Mr Hannan, adding that it would be a "fraction of the compliance costs".