Prime Minister looks to rally Tory troops at conference

David Cameron today sought to rally restive Tories with a pledge to use Britain's veto to block the European Union budget if it is not in the UK interest.

As the Conservative Party conference opened in Birmingham, the Prime Minister said he would not stand for "outrageous" attempts to increase the overall EU budget in forthcoming negotiations on spending for the period 2014 to 2020.

"If it comes to saying 'no' to a deal that isn't right for Britain, I'll say 'no'," he said in an interview with The Sunday Telegraph.

He also proposed a "bold thinking" plan for the EU to have separate budgets - one for the 17 eurozone nations and another for the 10 - including Britain - outside the single currency.

Meanwhile Chancellor George Osborne has finally ruled out a "mansion tax" called for by the Liberal Democrats.

The twin moves are likely to prove highly popular with Conservative MPs - particularly on the party right - but will heighten tensions with their coalition partners.

The Lib Dems reacted with dismay when Mr Cameron used the veto to oppose the EU fiscal pact last December, and they have continued to lobby Mr Osborne to adopt their plan for an annual levy on homes worth more than £2 million which they first proposed in opposition.

However Mr Osborne told The Mail on Sunday that he was not prepared to accept a tax which "clobbered" people who had worked hard and saved to buy their home.

At the start of what could be a tricky week - with the Tories continuing to trail in the polls and the economy mired in recession - Mr Cameron acknowledged that he needed to do more to explain to voters what the party was going in government.

"You spend a lot of time governing and deciding, and you don't spend enough time explaining. And I think conference week is a real opportunity to get out there and explain," he said.

He insisted that he was not ready to concede the political centre ground to Ed Miliband after the Labour leader's party conference speech claiming his was the true "One Nation" party.

"Are the Conservatives deserting the common ground of British politics? Absolutely not," he said.

He attacked Mr Miliband for "signalling right but turning left" and poured cold water on his much trumpeted feat of speaking for more than an hour without a text.

"It is difficult to give a speech without notes for 70 minutes. It's even more difficult when you haven't got anything to say," he said.