THE stakes on the euro's future could not be higher today as EU leaders battle to save the currency at what has been billed the "last chance summit".

Ahead of last night's dinner of the 27 heads of government in Brussels, the atmosphere was tense.

David Cameron was locked in talks with French President Nicolas Sarkozy and German Chancellor Angela Merkel, spelling out his demands on securing the single market and protecting Britain's financial services industry from the consequences of creating a tighter fiscal union among the eurozone members.

Earlier, the Prime Minister made clear he would have "no hesitation" in wielding Britain's veto to block any EU treaty change to resolve the eurozone crisis if it did not meet UK requirements.

Equally, however, Mr Cameron does not want to be seen as the villain of the piece, who causes any putative deal to fall apart.

He went into the two-day summit insisting he would "protect British interests".

During a Commons debate on the EU crisis, a Tory backbencher warned him not to return home with "a kind of Chamberlain-esque piece of paper".

Last night, Martin Callanan, leader of the Tory MEPs, upped the pressure on him when he joined the Conservative chorus calling for a referendum if a fiscal union of eurozone members was created.

Prior to the summit at a meeting of centre-right leaders in Marseilles, Mr Sarkozy did not pull his punches, warning there would be "no second chance" to save the euro and failure could trigger riots on the streets.

"Never has the risk of Europe exploding been so big," he declared, stressing: "Europe is facing an extremely dangerous situation."

He added: "We must reform Europe, we must rethink Europe. If we don't have the courage to do it, the same causes will produce the same effect.

"If we don't have the courage to do it, the people will rise up against us."

Mrs Merkel told the same audience not to expect an instant, all-consuming breakthrough at the summit, noting: "We'll be taking one further step to overcome this crisis but it won't be ended with one fell swoop."

Mr Cameron cut a lonely figure in the Belgian capital as he is regarded by many as the biggest obstacle to unity among the 27 European countries.

A warning about British intransigence was delivered by Jean-Claude Juncker, head of the eurozone finance ministers' group, who said: "I don't want the UK setting aside entire pages to say it will not do what all the others have to do. I will not accept that."

Earlier, Mario Draghi, European Central Bank president, coolled expectations the Frankfurt-based institution – which yesterday cut its interest rates and offered banks long-term funds – would buy up the debt of struggling eurozone economies if their leaders adopted tougher fiscal rules.

This had heartened the markets, but when Mr Draghi sought to disabuse them of deeper ECB intervention, shares fell and borrowing costs for Italy and Spain rose.

This morning, the Institute of Directors, in a colourfully entitled report, This sucker is going down, said there is a fundamental structural failure at the heart of the euro project – the absence of a sovereign lender of the last resort role for the ECB.

It adds that, unless this fundamental problem can be overcome, a "break-up of the euro is inevitable".

The consequences of the EU leaders failing in their task was spelled out starkly.

Willem Buiter, Citigroup economist and former central banker, claimed a eurozone break-up could cause a global depression with unemployment topping 20%.

Speaking to the Lords Economic Affairs Committee, George Osborne told peers: "Those who say we'd have a year or two of hardship and then bounce back out of it may be somewhat optimistic."

The Chancellor added: "There would be enormous damage."