Clegg is a passionate pro-European, but the crisis will create faultlines between non-eurozone members and the rest.

Shadow of crisis: Clegg hits out in frantic EU warning

Shadow of crisis: Clegg hits out in frantic EU warning

By Ian Dunt

Nick Clegg issued a tough warning to European leaders today, telling them that closer eurozone integration would effectively downgrade the UK's position.

The dramatic speech, made at an EU summit in Warsaw, comes amid a vote in the German parliament for enhanced powers for the eurozone's bailout fund.

The speech follows meetings yesterday between Mr Clegg – usually a committed pro-European – and David Cameron and George Osborne.

While British leaders understand the reasoning for closer economic cooperation given the increasingly frantic contortions in the eurozone, Britain is worried about that a core economic area would create a rupture with other EU countries.

"We are also clear that any change to governance structures must not lead to a weaker and divisive Europe where the aims of 'euro ins' are set against those of 'euro outs'," Mr Clegg said.

"There can be no inhibiting of trade, for example, and no obstructing the single market. Any decision that affects the 27 must always be taken by the 27."

He will add: "We cannot accept arrangements that would privilege the eurozone as a decision-making body over the European council.

"That is the surest way to rupture our union, undermining the huge strides that have been taken to secure cooperation between us, allowing walls to spring up even though we spent years knocking them down," he added.

British leaders are understood to be growing increasingly frustrated with Europe's performance.

William Hague recently branded the euro a "burning building with no exits", while Mr Cameron signed a letter to French president Nicolas Sarkozy with Australian and Canadian leaders, suggesting that he wanted to distance himself from the European crisis.