Where the two sides of the Atlantic stand together the world is a more secure, stable and prosperous planet

Tony Blair

"When we stand together, both sides of the Atlantic, either in situations of conflict or of trade or in regulating the vagaries of global finance or in issues of human rights, we most often prevail and we do so on the basis of what is right and just," he said.

Mr Blair also sought to counter claims by some commentators in the UK that he has to make a choice between Europe and America.

"It is an article of my political faith that I refuse point blank to do so. We will have the best of both worlds," he said.

"We will give up neither relationship. We will make them both work and make them work not just for Britain but for the EU and for the US."

Bilingual speech

Mr Blair, who on several occasions broke into French during his speech to the bilingual parliament, also sought to calm American fears over the proposed EU rapid reaction force, saying: "It is limited to crisis management, peacekeeping and humanitarian tasks.

"It is not a standing army. There will be no separate EU military planning structures and it applies only where Nato has chosen not to act collectively.

"Done right, it will strengthen Nato and Nato will remain the cornerstone of our collective security," he said.

The speech has already drawn criticism in the UK from the Conservatives.

Shadow foreign secretary Francis Maude said: "Labour are set to damage our relations with both Europe and the USA by double dealing and double crossing over the Euro Army."

On trade, Mr Blair made it clear that he was aiming to end the squabbling between the European Union and the North American Free Trade Association, the world's largest trading blocs.

Trouble-free trade

He referred to disputes over beef and bananas which were obscuring the fact that "98% of our trade is trouble-free".

"We cannot allow the remaining 2% to sour trading relations in the way it has.

"We should aim to break the logjam by the June EU summit in Gothenburg," he said.

Pomp and ceremony as Mr Blair arrives

Mr Blair is also holding private talks with his Canadian counterpart Jean Chretien with defence and America's planned National Missile Defence (NMD) system top of the agenda.

On Wednesday, Mr Chretien appeared to suggest in the Canadian Parliament that President Bush had told him privately that his administration would not go ahead with NMD if it would split Nato allies and provoke an arms race with Russian and China.

Mr Blair will want an insight into American thinking before he flies on to Washington on Thursday night.

The prime minister and and his wife Cherie will have their first meeting with Mr Bush and his wife Laura before the two leaders hold detailed but informal talks at the Camp David presidential retreat.