A senior Liberal Democrat cabinet minister has said that David Cameron's decision to veto a proposed EU treaty designed to bring stability to the eurozone "doesn't threaten the coalition".

Danny Alexander, the Chief Secretary to the Treasury, told Today presenter John Humphrys that "David Cameron had a very difficult hand to play" during last week's EU summit in Brussels.

And he added: "It is so important that we look at how we act as a government now, so that this setback does not become permanent isolation.

"But in a sense we use the various other areas where we are very positively engaged as a government, where we've been leading, to take those forward, to make sure that we don't end up in the kind of permanent isolation which I think would be terrible for this country, but which does sadly seem to be what some of the more extreme eurosceptics would like to see."

David Cameron will later explain to the Commons why he refused to sign up to a deal, a move described by his deputy, Nick Clegg, as "bad for Britain".

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