SUGGESTIONS that David Cameron has left Britain isolated in Europe, by deploying his veto, were downplayed yesterday by German Chancellor Angela Merkel, who insisted the UK would continue to play an important role in the EU.

Mr Cameron told the House of Commons he would “make no apology” for forcing the other EU members to strike their own “fiscal compact” outside the official treaty framework.

But he was accused of making a “catastrophic mistake” by Labour leader Ed Miliband.

The clash came in the final session of Prime Minister’s Questions before Christmas, at which Mr Cameron was flanked on the Government front bench by his Liberal Democrat deputy Nick Clegg, who has described the failure to get a deal at last week’s European Council summit as “bad for Britain”.

After staying away from the chamber on Monday for Mr Cameron’s statement on the Brussels summit, and joining his MPs in a mass abstention on a motion congratulating the PM, Mr Clegg was greeted with mocking cheers from Labour MPs as he took his seat.

Mr Miliband said that Mr Cameron had promised the coalition Government would operate in a “collegiate” way, and asked: “What’s gone wrong?”

But Mr Cameron retorted: “I make no apology for standing up for Britain.”

In Berlin, Mrs Merkel sought to mend fences with London by saying it was “beyond doubt for me that Great Britain will in future continue to be an important partner in the European Union”.

She indicated she had not given up hope of eventual UK involvement in the new compact.

But Downing Street said its position had not changed, and Britain would only sign up if it obtained safeguards for the City of London, which were roundly rejected last week.

Mrs Merkel also risked alarming British Euro-sceptics by saying that, as a result of last Friday’s agreement, “the vision of a genuine political union is beginning to take shape”. A new sense of shared responsibility across the 17 eurozone states and the EU’s other 10 members “will far outlast this crisis”, she said.