France and Germany have backed the idea of a more decentralised Europe with decisions taken away from Brussels wherever appropriate.

Mr Blair spoke about the development on the last leg of a whistle-stop tour of European nations to set the agenda for a European Union summit in Cardiff.

The last day of Mr Blair's visit took him to four countries

The government is determined to ensure the Cardiff summit - which marks the end of the UK's EU presidency - reflects the British priorities of jobs, the single market and the enlargement of the European Union.

But German demands for an annual £2bn rebate on its contributions to the European Union may yet overshadow the prospects for a harmonious end to the UK's presidency.

Some smaller EU member states are also against decentralisation- seen as a way for larger states to become more powerful players.

'UK preoccupied with N Ireland'

Correspondents say the UK government wants to avoid any repeat of the wrangling over the head of the European Central Bank that marred last month's Brussels summit.

The UK is seeking to set out a timetable for sorting out a range of complicated budgetary issues to be tackled after it has handed the presidency on to Austria.

Mr Blair's European tour is also intended to counteract some of the criticism that has been levelled at the his country's handling of the EU presidency.

German MEP Elmar Brok said the UK and its senior ministers had been preoccupied with the situation in Northern Ireland, and "unable to concentrate" on the EU.

Mr Blair said that on his trip around Europe he had found a growing consensus for economic reform.