British Deputy Prime Minister Nick Clegg opened up tensions in the coalition government, warning that the UK risks becoming an international 'pygmy' after vetoing a new EU treaty.
The leader of the pro-Europe Liberal Democrats spoke out despite a poll showing public support for Conservative Prime Minister David Cameron's decision to stay out of deal aimed at solving the eurozone debt crisis.
Clegg had at first publicly backed the prime minister after Friday's EU summit in Brussels, but he broke ranks on Sunday and said he had told Cameron the outcome was "bad for Britain".
"I am bitterly disappointed by the outcome of last week's summit, precisely because I think there is now a real danger that over time the United Kingdom will be isolated and marginalised within the European Union," Clegg told BBC TV.
He also hit out at so-called "eurosceptic" elements among Cameron's Conservatives who are now pushing for Britain to hold a referendum on its troubled membership of the EU.
"I think a Britain which leaves the EU will be considered to be irrelevant by Washington and will be considered a pygmy in the world," he said.
But he denied that the Conservative-led coalition, which took power in 2010 with a mission to cut Britain's record deficit with a string of tough austerity measures, would now collapse.
"It would be even more damaging for us as a country if the coalition government were now to fall apart, that would create economic disaster for the country at a time of great economic uncertainty," he said.
Britain opted out of an agreement by the other 26 EU states to join a "new fiscal compact" at an all-night summit in Brussels on Friday, angering much of Europe in the process as it tries to prop up the euro.
Cameron said he wielded his veto against a full-blown change of the EU's treaty after other leaders rejected his attempts to secure safeguards for Britain's crucial financial services industry.
But several newspapers reported Sunday that there had been an apparent failure of British diplomacy at the summit, with its proposals being circulated late and misreading the mood of the other nations who were focused on the euro.
Foreign Minister William Hague, a leading eurosceptic and former Conservative leader, rejected Clegg's comments on marginalisation but agreed that the coalition was safe for now.
"The Liberal Democrats are very clear as we are that the coalition continues and that's in the vital interest of this country," he told Sky News.
A poll published in the eurosceptic Mail on Sunday newspaper showed 62 percent support for Cameron's decision and 66 percent backing for a referendum on Britain's role in the EU. It sampled 1,020 people online.
Cameron has not ruled out a referendum but is keen to avoid it, partly because of the damage it could do to the coalition with the centrist Lib Dems, who are not the natural bedfellows of his centre-right Conservatives.
Another senior Lib Dem, Business Minister Vince Cable, openly warned that Britain was left in a "bad place", echoing concerns from some business leaders that London will now be unable to stop new financial regulations.
The BBC meanwhile reported that John Cridland, the head of Britain's biggest employers' body, the Confederation of British Industry, had conceded his members were worried about the potential impact of the veto.
But Cameron won backing from Austria's eurosceptic far-right.
"I think it was brave of... Cameron to have no truck with this (EU) superstate," Austrian Freedom Party head Heinz-Christian Strache said.
Austrian central bank governor Ewald Nowotny said meanwhile that Britain's refusal had created a "two-speed Europe."
But in France, Economy Minister Francois Baroin appeared unconcerned at the prospect of Britain becoming isolated from the EU, saying simply that such an outcome would be "too bad."
In Germany, Bundesbank chief Jens Weidmann said that the EU summit represented "progress" towards resolving the debt crisis, but stood firm in his opposition to a greater role for the European Central Bank.
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