David Cameron has scrapped plans to deliver a long-awaited speech on Britain's future in the European Union after abandoning a trip to the Netherlands as the Algerian hostage crisis worsened.
Downing Street indicated that the prime minister would deliver his speech, in which he planned to warn that Britain could "drift towards the exit" unless powers are handed back from the EU, once the hostage crisis had ended. The postponement was announced shortly before the prime minister was due to fly to meet the Dutch prime minister, Mark Rutte, before his speech in Amsterdam.
Some Tories were surprised that No 10 took so long to abandon the trip. Downing Street had acknowledged the gravity of the crisis in Algeria on Thursday morning by announcing that arrangements were being made for the prime minister to chair a meeting of the emergency Cobra committee from The Hague on Friday.
Ed Miliband, who was privately suggesting that the prime minister appeared to be putting the interests of Conservative Eurosceptics above his duties to deal with a security crisis, had earlier said that the prime minister had spent six years preparing a speech that will cause five years of uncertainty.
Cameron had been due to warn his fellow European leaders that British membership of the EU could be put at risk unless its membership terms are changed. "If we don't address these challenges, the danger is that Europe will fail and the British people will drift towards the exit," Cameron was due to say in the speech to an audience of business leaders in Amsterdam.
"There is a growing frustration that the EU is seen as something that is done to people rather than acting on their behalf. And this is being intensified by the very solutions required to resolve the economic problems.
"People are increasingly frustrated that decisions taken further and further away from them mean their living standards are slashed through enforced austerity or their taxes are used to bail out governments on the other side of the continent."
The prime minister had planned to brief the leaders of France and Italy on his speech, after earlier discussing what he was planning to say with US president Barack Obama after the White House had made clear last week it wanted "a strong British voice" in Europe. Last night the White House made clear that Obama maintained the pressure on Cameron in the call.
A spokesman said: "The president underscored our close alliance with the United Kingdom and said that the United States values a strong UK in a strong European Union, which makes critical contributions to peace, prosperity, and security in Europe and around the world."
Cameron was due to declare that he will demand the repatriation of some powers if he wins an overall majority at the next election. The new terms of British membership would then be put to the people in a referendum, possibly around 2018.
Cameron was planning to tell the business audience in Amsterdam: "There is a growing frustration that the EU is seen as something that is done to people rather than acting on their behalf. And this is being intensified by the very solutions required to resolve the economic problems. People are increasingly frustrated that decisions taken further and further away from them mean their living standards are slashed through enforced austerity or their taxes are used to bail out governments on the other side of the continent.
"More of the same will not secure a long-term future for the eurozone. More of the same will not see the European Union keeping pace with the new powerhouse economies. More of the same will not bring the European Union any closer to its citizens. More of the same will just produce more of the same – less competitiveness, less growth, fewer jobs. And that will make our countries weaker, not stronger," Cameron was due to say.
But the prime minister was given a taste of the unease among business leaders when one of Britain's most senior business leaders warned of the dangers of "inconsequential isolation". Sir Andrew Cahn, until recently head of the government's main overseas trade body, UK Trade and Investment, told the Guardian: "The chill factor is there, the nagging worry that the UK is retreating into inconsequential isolation."
Lord Browne, the former BP boss, said: "Uncertainty is the enemy of investment, and we should be wary of doing anything which tarnishes Britain's reputation as a home of choice for human and financial capital."
The prime minister was due to say that he supports British membership of the EU and that his aim is to stabilise support in Britain by addressing concerns about power amassed in Brussels. He wants to use a major revision of the Lisbon treaty, which may take place after the European parliamentary elections in 2014, to table his demand for the repatriation of social and employment legislation.
Cameron planned to identify the three major challenges facing Europe as the eurozone crisis, weak European competitiveness, and a lack of democratic accountability. Failure to address these would increase support among those who want to leave, though he was due to say that is not his preference. "I do not want that to happen. I want the European Union to be a success and I want a relationship between Britain and the EU that keeps us in it."
European unease over his speech manifested itself when the president of the European parliament warned that the prime minster could be disastrous for the EU. Martin Schulz, a German SPD MEP, wrote on the Huffington Post website that the prime minister wanted to set a "dangerous precedent", which might lead to the "breakup of the EU".
But the prime minister last night won support from Boris Johnson, the mayor of London, who has in the past criticised Cameron's encouragement of greater integration in the eurozone. The London mayor moderated his position by saying that Britain should permit moves towards greater fiscal co-ordination in the eurozone.
In remarks briefed before the prime minister's speech was cancelled, Johnson said Cameron should tell the EU: "We will allow you to use our common EU institutions – which we help fund – to pursue your project, if you help us with a renegotiation. We therefore want to complete the single market – which everyone supports – and we want to get rid of some of the barnacles that have become attached to the hull."