We have got huge opportunities here to make steps forward for Britain provided we play our cards right

Tony Blair

His comments came on an opening day marred by clashes between riot police and anti-capitalist protesters.

Earlier former prime minister John Major warned Mr Blair not to give too much ground during the summit, likely to be one of the most important gatherings of EU leaders since they hammered out the Maastricht Treaty.

Another headache for the government loomed as controversies over the European Rapid Reaction Force emerged on the first day.

The inter-governmental conference (IGC) attended by leaders of the 15 EU member states will thrash out the details of fundamental reforms to the union.

The talks, which are scheduled to last for three days, will see the UK being asked to drop its national veto in many policy areas.

Blair stays positive

But as he arrived in the south of France Mr Blair said: "Of course there are areas like tax where we've just got to protect our own position and that's so of all the other countries.

"But we've got to shake ourselves out of this position of thinking a council like this is simply damage limitation - it isn't.

"We have got huge opportunities here to make steps forward for Britain provided we play our cards right."

Tear gas has been fired at protesters

Speaking on BBC Radio 4's Today programme, Mr Major said it was "absolutely essential" the prime minister did not give away the national veto on issues like tax and social security.

Both areas have already been ring-fenced by the government, which has set out a total of six issues, including border controls, which it will not allow to pass to qualified majority voting.

Mr Major said: "The prime minister ought not to concede too much as we know there is another IGC to come."

But he said: "The prize at the end of this summit is a very great one."

There is a clear fact that we want to be in Europe, not run by Europe

William Hague

The complex negotiations are certain to cause much political controversy in the UK.

The Conservatives, although they back enlargement, fear that many of the reforms under discussion will see progress towards the creation of an EU superstate.

Hague's fears

Mr Major's successor as Conservative leader, William Hague, said he feared the "rights" of the UK would be squandered at the summit.

Mr Hague said: "I feel we are going to see more and more of this country's rights being given away.

Foreign Secretary Robin Cook is welcomed by President Chirac

"We should be seeing more co-operation but with flexibility. There is a clear fact that we want to be in Europe, not run by Europe."

The negotiations are likely to be extremely hard fought as member states are being asked to surrender their national vetoes in many policy areas, and preliminary talks have provided little consensus.

A declaration on defence matters is also being negotiated, with Britain strongly opposing any wording which suggests establishing a separate military structure for the planned Rapid Reaction Force that would break the link with Nato.

At a press conference French President Jacques Chirac acknowledged the planned force would have to be co-ordinated with Nato - but insisted they would be independent of each other.

However, in an interview with the BBC, Mr Blair said there was "no question" of Britain agreeing to a capability which split the force from Nato.