David Cameron’s wielding of the European ‘veto’ against the fiscal treaty at the start of December felt like a game-changer for the Tories. It reunified his parliamentary party after two decades of backbench disquiet about the EU. It put the end to hopes of a breakthrough by UKIP, which had been near to overtaking the Lib Dems in the polls. By enabling the Tories to squeeze UKIP it helped them rise above their 2010 general election level of support and catch up to level-pegging with Labour. This event precipitated a crisis of confidence within Labour that we have only just recovered from.

But the unravelling of the veto this week, with news that Cameron can’t stop the countries that signed the (non-EU) treaty from using UK-funded EU institutions to implement it, shows this was a shallow victory.

Ed Miliband got the tone right with his jibe that ‘With this prime minister, a veto is not for life, it’s just for Christmas. He said it was a real veto on the use of EU institutions and his backbenchers believed him, even his cabinet believed him.’

This issue has the potential to crack the coalition into its three component parts. Note three, not two. Cameron and his inner group have to manage two coalition partners: the pro-European Lib Dems and the anti-European Tory right, which is increasingly powerful in their parliamentary party as older pro-Europeans retire and rightwing grassroots parties apply a Eurosceptic hurdle to potential candidates. This factor is important at the moment: the boundary changes mean that most Tory MPs are more worried about whether the activists in their new association reselect them than about what the whips say to them about advancement, and in any case coalition government means that there are fewer ministerial posts that the whips can use as carrots to buy off potential rebels.

Cameron’s problem is that he never did what Blair did and took on his party’s extremists and their shibboleths with a ‘Clause IV’ moment, despite temporary ideological airbrushing on other issues like husky- and hoodie-hugging.

Not having beaten them, Cameron has had to appease the Eurosceptics.

Because of the strength of UKIP they have been able to deploy the threat that they and the voters they represent have somewhere else to go outside the Tory party. Such is the strength of their view that the EU is an existential threat to the UK that they would rather be right about this and out of power, than in power and compromise on it.

The Tory anti-Europeans have their own equivalent of Leninist ‘transitional demands’ (‘stop me if you’ve heard this one before’ to quote The Smiths). Just as Leninists call for things that sound superficially appealing but cannot be delivered without a revolution, anti-Europeans call for actions by Cameron that cannot be delivered within the context of the EU. That’s because that is their real agenda – not a veto here, or an opt-out there, but to put the UK in a position where it can’t carry on as an EU member state.

Not being totally fixated like them, and being clued-up enough to see that our already-battered economy would be in a cold place indeed without EU trade, Cameron wants to try to square the circle. He has been trying to be Eurosceptic enough to keep his backbench attack dogs well fed on raw policy steak, and to reap the electoral benefits from the hefty Daily Mail vote, while not cracking his coalition with the Lib Dems or pushing the other EU states into a complete breakdown of relations.

He is a class act but this was a political balancing act too far.

The EU has been the unmaking of every Tory leader since Heath, either leading to war with their own party or the electorate viewing them as unhinged. It may yet be the unmaking of Mr Cameron.

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Luke Akehurst is a constituency representative on Labour’s NEC, a councillor in Hackney, writes regularly for Progress here, and blogs here

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Photo: President of the European Council