David Cameron last night vowed to stay vigilant against further European integration - after setting out Britain's "red lines" on economic sovereignty at his first euro-summit.

He spent the day in talks on stepping up economic surveillance to prop up the euro and restore growth and jobs to Europe.

He made time too for private talks with some of his EU counterparts - most of whom he had never met.

He insisted that Britain under the new coalition would play a "positive, active, and engaged" EU role.

But before returning to London after resisting Brussels' efforts to "peer review" the Chancellor's annual Budget, he also said it was necessary to stay "on guard" against further integration.

"Of course there are those in Europe who want to progress towards greater integration and seek treaty changes to bring it about," the Prime Minister said.

"But now Europe is so much wider and broader, with the countries of eastern and central Europe as members, that will help push us in a more intergovernmental direction... the wider and broader Europe takes some of the pressure off further integration - but you also have to be on your guard."

Asked if his euroscepticism had been tempered by today's meeting Mr Cameron said: "There are things we can do at the EU level that are important and in British interests - even my most eurosceptic colleagues would agree.

"I strongly believe that where there is political will in Europe, Europe is strong.

"Where I am entirely at one with my party is that Europe should be about political will and should not be about endless institution building and new rules and new processes.

"We should be doing things, rather than building new structures to talk about doing things."

Apart from insisting that Britain would not submit its Budget programme to Brussels in advance, Mr Cameron also insisted that proposed hefty sanctions against countries breaching deficit and debt limits set by the EU must apply only to the single currency member states.

Mr Cameron and Chancellor George Osborne both made clear before the summit that the new coalition Government was fully behind post-economic crisis plans for better co-ordination of national efforts to get deficits and debt down and boost growth and jobs and aid recovery.

But where economic sovereignty is under threat, the co-operation stops.

"The euro has to sort out its own problems and issues," he said.

"Our red line is that I will not support a transfer of powers from Westminster to Brussels.

"We are not in the euro, and we are not going to join the euro, and if the eurozone countries, who have chosen to join, need to strengthen their position, it is not for us to transfer sovereignty to do that.

"A strong euro is very much in Britain's national interest and the UK would support and co-operate with economic recovery across Europe by getting to grips with the national deficit and debt problem.

"The thing that most undermines jobs and growth recovery is not dealing with deficits (in EU countries).

"If we don't deal with our debts and deficits we will never have the economy we need to get sustainable recovery.

"You can't put a blindfold over your eyes and pretend that the world is not like that, because it is."

Final decisions on EU "economic convergence" measures are due to be agreed at another summit in October.

Meanwhile, Mr Cameron described today's conclusions - including a summit pledge to agree tough new sanctions against Iran's nuclear enrichment programme - as a "good outcome for Britain".

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