The Government is acting in a "profoundly unwise" way over the European Union's new fiscal pact, the Tory eurosceptic chairman of a parliamentary committee has said.

Bill Cash said the Government was taking both political and legal risks by suggesting the need for action while failing to explain how it will carry it through or what concessions it seeks.

Mr Cash, Conservative MP for Stone, spoke out as the European Scrutiny Committee, which he chairs, published a report into the Stability, Coordination and Governance Treaty – intended to resolve the crisis in the eurozone and backed by 25 of 27 EU governments, but rejected by the UK.

The committee warns the treaty may be "politically impossible to enforce" and that while such an outcome may be undesirable, "some form of breakdown of the eurozone clearly remains possible".

The committee said it felt the UK Government should view the treaty as unlawful because it does not enjoy unanimous support of all 27 EU members, as required by EU treaties.

Mr Cash said: "Politically and legally, it is profoundly unwise for the Government to suggest taking action, and then not to explain how it intends to carry it through, or what concessions are now being sought and achieved.

"The approach to this treaty provides further and ever more disturbing evidence of the European Union, in the context of increasingly coercive attitudes by Germany and France, dangerously ignoring its own precepts for political ends."