By politics.co.uk staff
A two-day summit of European leaders is seeing David Cameron bid to undermine the developing 'pact for the euro', according to reports.
The prime minister is in Brussels at a summit overshadowed by Portugal's political crisis. The Iberian country's prime minister Jose Socrates resigned yesterday after the Portuguese parliament rejected an austerity package.
The developing situation means Britain could face having to contribute £3 billion to an EU emergency bailout, Open Europe said.
While most countries in the eurozone seek to bolster their competitiveness, Mr Cameron will lead a group of northern countries seeking to encourage liberal reform of the EU.
Chancellor George Osborne referred to the moves in his Budget statement yesterday in a section on tackling red tape. He said: "We will take this fight against regulation to Brussels, where... the prime minister is this week recruiting other European allies to ensure our continent doesn't price itself out of the world."
A letter signed by Mr Cameron and the leaders of eight Scandinavian and Baltic states warns against "reinforcing economic decline", the Financial Times newspaper reported.
It quoted a Downing Street insider as saying: "We don't think there's anything there at the moment to be worried about, but it could be the start of a process."
This week's Brussels summit was supposed to have been the culmination of negotiations leading to an agreement on how to prevent the eurozone's debt crisis from spreading any further. The Portuguese crisis has scuppered those plans.