British Prime Minister David Cameron admitted Friday there are "legal difficulties" with his vow to block European nations from using EU institutions to discuss a pact aimed at saving the euro.
At a summit in Brussels last month Britain, which does not use the euro, was the only member of the 27-state European Union to refuse to join the agreement to deepen fiscal integration in the bloc.
Cameron said at the time that Britain was considering blocking its EU partners from using the union's buildings and institutions to take the pact forward.
But when asked on BBC radio if he still planned to do that he appeared to back down, saying: "There are legal difficulties over this."
Pressed about whether Britain would use the European Court of Justice to block the rest of the EU using the institutions or, for example, using the European Commission to provide data, he said: "Well, they (other EU nations) do that now."
Britain would do "everything possible" to ensure that the single market and competitiveness were not discussed outside the full EU framework, but he stopped short of saying it would also block discussion of fiscal union by the other 26 states.
"What we can't have is the single market being discussed outside the European Union and we'll do everything possible to ensure that doesn't happen," he said.
The "fiscal compact" committing governments to tough budgetary rules will be discussed by EU leaders at a special summit on January 30 with the aim of adopting it at another meeting in March.
The stance taken by Conservative leader Cameron has raised tensions with Deputy Prime Minister Nick Clegg, the leader of the Liberal Democrats, who are the junior partners in his coalition government.
Clegg has previously said that Britain risks becoming a "pygmy" on the international stage by staying out of the pact.