UK Deputy PM dismisses Cameron's EU strategy as 'wishful thinking'

By Guy Faulconbridge and Andrew Osborn LONDON (Reuters) - Prime Minister David Cameron's plans to renegotiate Britain's ties with the European Union are wishful thinking and likely to yield only minor concessions that will not unite his governing Conservative party, his coalition partner will warn on Friday. In a speech at Thomson Reuters in London, Nick Clegg, Britain's deputy prime minister, will launch one of his strongest critiques of Cameron's Europe policy so far as he unveils his own ideas for reform and sets out the case for Britain to remain inside the 28-nation bloc. "The Conservative leadership has spent the last three years ducking and weaving, looking for a way out," Clegg will say, according to advance extracts from his speech. "David Cameron started with grand plans for the repatriation of powers, then he shifted ground. None of this has anything to do with the real issues - the need for a more competitive EU - it's all about managing internal Conservative party divisions." The robust nature of Clegg's criticism is likely to cause tensions within Britain's two-party coalition government ahead of European elections later this month. Clegg's party, the Liberal Democrats, are the junior partner to the Conservatives, and polls suggest they could come fourth in the vote. The UK Independence Party (UKIP), which campaigns for Britain to leave the EU, is likely to poll ahead of both parties fighting it out for first place with the opposition Labor party. Cameron has promised to try to renegotiate Britain's EU ties and to claw back a range of powers if re-elected next year and to then give Britons a referendum on whether to stay or remain inside the EU in 2017. But Clegg, whose party has styled itself as Britain's most pro-EU force, will say the strategy is doomed. THREAT "You cannot secure a new settlement for Britain through a one off negotiation conducted under the threat of exit," Clegg, 47, will say at a Reuters Newsmaker event in its London headquarters in Canary Wharf on Friday. "He'll be able to agree various minor opt outs and exemptions for Britain with other European leaders. But we wouldn't let the French or Germans pick and choose the bits of the Single Market they like, so the idea that they would do the same for us is wishful thinking." Cameron has so far garnered only limited backing for his plans among other EU states and German Chancellor Angela Merkel has ruled out the prospect of a far-reaching overhaul of the bloc's treaties. The opposition Labor party opposes Cameron's idea of a referendum, saying it creates uncertainty and discourages foreign investment in Britain. Clegg, a Cambridge-educated former member of the European Parliament who speaks five languages, will urge Cameron to change tack, suggesting the only way to achieve reform is at the negotiating table. "You fight Britain's corner effectively not by going on a whistle-stop tour of Europe's capitals, a list of make-or-break demands in hand," Clegg will say. "You do it by engaging with our neighbors, forging alliances with like-minded states and winning the argument." Clegg, whose party, some pollsters have predicted, could lose all its member of the European Parliament, will argue that Cameron's attempts to appease his own backbench lawmakers who want to leave the EU has trapped the prime minister. "David Cameron has set himself on a collision course with his backbenchers because, no matter what repatriation package he negotiates, it will never be enough to satisfy them," Clegg will say. Clegg, who has good relations with the 47-year-old prime minister with whom he has shared power since 2010, said Cameron had sought to tone down his demands to propose changes that would not require difficult-to-get EU treaty change. Unveiling his own 10-point plan to reform the EU, Clegg said the Liberal Democrats would push for changes to the EU budget, cuts to red tape, less waste and for more devolved powers for national parliaments. "Europe should do more of what it's good at, less of what it isn't," Clegg will say. (Editing by Robin Pomeroy)