Brown warns over 'uncompetitive' European economy

Gordon Brown today issued a stark warning that Europe had to radically overhaul its economy if it was to have a hope of competing on the global stage.

Amid fresh fears that Brussels will face a crisis over its plans for a new constitution, the Chancellor told the Cabinet he wanted to use Britain's imminent presidency of the EU to push through vital reforms.

The Chancellor warned that "the global economy is flying with one wing unless Europe begins to pull its weight".

Mr Brown's remarks came as the chances of Britain holding its own referendum on an EU constitution appeared to be receding fast.

Nicholas Sarkozy, the leader of France's ruling UMP party, admitted that a "No" vote in his country's referendum this Sunday was now certain. "The thing is lost," he said.

However, in a presentation to the Cabinet, Mr Brown warned that pro-Europeans would boost their cause in the UK if Europe transformed its under-performing economies.

The Chancellor said he would call on the Tories and Liberal Democrats to join a cross-party consensus to demand radical change to EU economies in the British national interest.