Nick Clegg lashes out at PM and vows to rebuild ties with Europe

Nick Clegg promised to rebuild the government's shattered relationship with the rest of Europe and risked opening a coalition rift by going public with his "bitter disappointment" at David Cameron's decision to block a new EU agreement.

The deputy prime minister said Britain risked becoming "isolated and marginalised" from the European mainstream and, along with senior Liberal Democrats, spent the weekend contacting European leaders in a "strategy for re-engagement to recover lost ground", according to a senior government source.

Several high-profile figures, including the former leader Paddy Ashdown and the party president, Tim Farron, joined Clegg in a wide-ranging attack on Cameron's resort to a British veto.

Clegg will hold a meeting with business leaders this week to convince them "they had not completely had the door shut", according to an aide. There is growing concern that the 26 EU countries who agreed on greater fiscal integration last week will now be able to strike deals affecting British banks and businesses.