Brown says Tory 'isolation' on EU puts economy at risk

Gordon Brown will adopt a more positive stance on Europe today by promising a policy of "full engagement" with the European Union.

In a speech on the global economy, the Prime Minister will answer critics who accused him of alienating Britain's EU partners by turning up three hours late for last month's signing ceremony in Lisbon for the new EU reform treaty. He was criticised by both pro-Europeans, who accused him of pandering to Eurosceptic newspapers, and sceptics who said he should not have signed the treaty at all.

He will accuse the Conservative Party of putting Britain's economic future in jeopardy by planning to isolate the country inside the EU. He will say: "At this time of global economic uncertainty, we should not be throwing into question our future membership of the EU – risking trade, business and jobs. Indeed, I strongly believe that rather than retreating to the sidelines we must remain fully engaged in Europe so we can push forward the reforms that are essential for Europe's, and Britain's, economic future."

Mr Brown will argue that the EU is the key to the success of British business because it accounts for almost 60 per cent of our trade, with 700,000 British firms having trading ties with Europe and 3.5 million British jobs depending on it.

He will warn that 2008 will be a "difficult year" for the world economy but argue that Britain is well-placed to withstand the financial turbulence. Last week, the Tories launched a campaign to dent Mr Brown's reputation on the economy by saying he had not done enough in the good times to prepare the nation for the hard times that now lie ahead.

Yesterday Labour attacked David Cameron after he appeared to play down the prospect that a Tory government would hold a referendum on the EU treaty even if it had already been approved by parliament. William Hague, the shadow Foreign Secretary, has hinted that such a retrospective public vote might be held but Mr Cameron suggested that the expected 2010 general election might make it too late to hold such a referendum.

He told the BBC's Andrew Marr Show: "If it's passed through Parliament we can still hold a referendum. The difficult question, I accept it is a difficult question, is well what if it goes through Parliament, if it goes through every other country and is implemented by every other country, if no other country holds a referendum, if the election isn't till, you know, 2010, what then?"

The Tory leader added: "Now, obviously we will not be content to rest at that point because we think too much power would have been passed from Westminster to Brussels. But I don't want to explain exactly what we'd do in those circumstances because we've got to wait and see whether they actually take place."

Jim Murphy, the minister for Europe, said Mr Cameron's policy was in "complete confusion". He said: "He doesn't want to explain his policy, no doubt because he recognises the Tory policy of fundamental renegotiation represents a new kind of economic instability and a real threat to British business and British prosperity."

He said that trying to restart talks on a treaty that had already been ratified by all 27 member states would put the Tories into the extraordinary position of repudiating an international treaty, which would mean reopening and renegotiating Britain's terms of EU membership.