David Cameron retreats on European referendum.

This video shows how Cameron started out yesterday, attempting to hold on to his ludicrous line that he would have a referendum only if the Lisbon treaty had not been ratified by all other European countries.

Andrew Marr easily skewers him on his flawed logic. His squirming, as he attempts not to give a promise of any kind, is actually painful to watch. Indeed, it was so painful that by the end of yesterday even he had realised that this was untenable and he had given up on the notion of a referendum altogether.

This, of course, will enrage to Eurosceptics within his own party, so Cameron has set out to assuage them with the promise that he will negotiate in order to bring these powers back to a national level.

In a move to assuage Eurosceptic anger inside and outside his party, Cameron will instead launch a campaign to repatriate powers which the Tories believe should be held at a national level. Cameron is planning to:

• Repatriate social and employment powers to a national level. This would effectively mean restoring Britain's opt out from the social chapter and would need the agreement of all 27 member states.

• Demand greater power over justice and home affairs. Under Lisbon these are voted on under a system which gives no member state a veto. France and Germany are likely to resist change here because it would mean unpicking this part of the treaty which gives Britain an "opt in" – the right to refuse to sign up to laws in this area.

• Issue a warning to the EU that a Tory government will adopt a hardline stance if its demands are not accepted. This could involve holding a UK referendum on Cameron's more modest proposals or holding up the next round of EU treaties to admit Croatia and Iceland into the union.

So, in order to placate Dan Hannan and the other Eurosceptic nutters which Cameron has aligned himself with, he has set himself up for battles with with Sarkosy and Merkel.

All of this has come about because Cameron, in order to win the Tory leadership contest against David Davis, made a promise to the bonkers wing of his party which Davis was not prepared to make: that he would leave the centre right group in Europe and align himself with the far right fringe.

So, let the games begin.

Vaclav Klaus, the Eurosceptic Czech president, has already signalled that he thinks Cameron has badly played his hand here.

"There will never be another referendum in Europe," he told the BBC after the Irish vote. "The people of Britain should have been doing something much earlier and not just now, too late, saying something and waiting for my decision."

Europe always seems to eat Tory leaders and Cameron steps into his most important party conference with everyone talking about nothing else.

As Michael White puts it in today's Guardian:

Cameron is now close enough to power not to want to give fresh hostages to fortune as he did when outflanking David Davis for Tory leader in 2005. Most politicians learn the hard way that boasts made in opposition often come back to haunt them: welcome to government.

So Cameron and William Hague, who knows at bitter personal cost that Euro-loathing is a low priority for most British voters, seek to get through this week's conference without admitting how weak their negotiating hand is, whatever Prague decides.

Euro-loathing is something which matters greatly to a certain wing of the Conservative movement, but the rest of the country really doesn't get excited about it at all.

Cameron is attempting to ride the back of this particular tiger, but I seriously doubt that he has the skill to do so without the bloody thing devouring him whole.

And now he steps into his final Tory Conference before he possibly becomes Prime Minister with no-one talking about anything else. Having managed to get this far without ever revealing his cards, fate - with the Irish voting yes - has forced Cameron to say what it is that he would do. The end result has not been pretty to watch.

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Tags: Cameron, EU, Tory Party Conference, Lisbon Treaty