Britain's junior coalition partner insisted Monday that tensions over Europe would not topple the government, as Prime Minister David Cameron readied to tell lawmakers why he vetoed a new EU treaty.

His statement to parliament was due after the European Union warned that Cameron's move would not help Britain avoid regulation for the vital City of London financial services sector.

At a summit in Brussels on Friday, Cameron opted out of an agreement by the other 26 EU states to join a "new fiscal compact" aimed at saving the debt-hit euro, angering much of Europe.

While the move has delighted eurosceptics in his Conservative party it has opened a rift with the pro-Europe Liberal Democrats, but a Lib Dem cabinet minister said the coalition would serve its full five-year term.

"This doesn't threaten the coalition," Chief Treasury Secretary Danny Alexander told BBC radio.

"The coalition was formed, two parties coming together in the national interest to deal with the fundamental economic challenges that we face as a country. That is the central task of this government."

Deputy Prime Minister Nick Clegg, the Liberal Democrat leader, took aim at Cameron on Sunday, saying the veto could leave Britain as an international "pygmy".

Cameron has said he had taken the decision to safeguard London's financial services industry from tougher EU regulation and taxes.

His spokesman said on Monday that Britain was in discussions with the other 26 European nations about whether they should be allowed to use EU buildings to pursue the euro pact, and added that London has doubts over the issue.

The spokesman said Britain would "engage constructively" but would "also look to protect our national interests".

But EU Economic Affairs Commissioner Olli Rehn warned that the British veto would not protect the City of London.

"If this move was aimed at preventing bankers and financial corporations of the City (of London) from being regulated, that's not going to happen," Rehn stressed.

French President Nicolas Sarkozy took a more conciliatory tone, saying the EU was now a two-speed alliance -- something that London denies -- but insisted that Britain would not be forced out of the bloc's single market.

"We need Great Britain," Sarkozy said in an interview with the French daily Le Monde.

German Chancellor Angela Merkel's spokesman said Britain remains an "important partner" despite its "regrettable" veto.

Cameron's statement to parliament at 1530 GMT promised to be a raucous session, with opponents accusing him of failing to win any safeguards and of being in thrall to the anti-Europe wing of his party.

Cameron's position was weakened in October after a rebellion by 81 lawmakers calling for a parliamentary vote for a referendum on Britain's relationship with the EU, and they could seek to press their position.

"This is the first veto in history not to stop something," Miliband, whose brother is Labour leader Ed Miliband, told the BBC.

But opinion polls show broad public support for Cameron's move.

In a poll for The Times published on Monday, 57 percent of voters supported his decision on Europe, and only 12 percent believed the veto would not safeguard the City of London. The Populus poll sampled 1,951 people.

Much of Britain's eurosceptic press is also behind Cameron.

The Rupert Murdoch-owned Sun newspaper, Britain's biggest selling daily, branded the Lib Dem leader "Villain Clegg" and accused him of being a "cynical opportunist".