Nov. 4 (Bloomberg) -- David Cameron pledged to return powers over social and labor laws from the European Union, saying he didn’t want a showdown with leaders of the region if his Conservative opposition wins the next U.K. election.

He also promised a referendum on any future EU governance treaties or attempts to adopt the euro. He said his party would enact a “Sovereignty Bill,” asserting the U.K. Parliament’s ultimate authority in setting British laws.

The commitments are meant to placate members of his own party who want to reduce the influence of the EU in the U.K. affairs after the Lisbon Treaty streamlining governance of the region was ratified yesterday. Divisions within the party over Europe helped destroy the last Conservative government. Cameron said he didn’t want a fight with EU leaders to distract him from reducing the U.K.’s record deficit.

“We will not rush into some massive euro-bust-up,” Cameron told reporters in London today. “If we win the election, we will inherit the worst public finances of any incoming government for 50 years. That has to come before anything else.”

Today, Cameron gave himself “the lifetime of a Parliament,” or up to five years, to achieve his goals. That would take him past the next round of EU budget negotiations, in 2013. Cameron said he wanted to see “a tough financial settlement” in those discussions, though he said his top priority would be cutting the U.K.’s deficit.

‘Iceberg Issue’

“Europe is the iceberg issue for the Conservative Party in government,” said Tim Bale, lecturer in British and European politics at Sussex University. “I don’t think Cameron, if he is sensible and aware of how much else he has to do, is going to want to spend the early part of his first term having a fight with the EU.”

Some Conservative lawmakers weren’t satisfied. Douglas Carswell told BBC News he still thought there should be a referendum on the U.K.’s relationship with the union. Another, Bill Cash, earlier issued a statement saying Britain needed “a full referendum.”

Answering questions, Cameron said his party is “close to unanimous” in support of his policy towards the union. Splits over Europe brought down Margaret Thatcher in 1990 and dogged her party throughout the ensuing decade.

Party Divisions

While senior party figures including former Deputy Prime Minister Michael Heseltine and former Chancellor of the Exchequer Ken Clarke advocate closer ties and adopting the euro, most in the party oppose any reduction of sovereignty.

It was to appeal to these “euroskeptics” that Cameron, running for his party’s leadership in 2005, said Conservative members of the European Parliament should leave the European People’s Party and set up a new group for those opposed to increased federalism.

Foreign Secretary David Miliband has called Cameron’s decision to leave the EPP a “divorce from the mainstream,” saying that the Conservatives have allied themselves to extremists. Cameron says his new grouping includes parties in government in eastern Europe.

“I don’t know anybody who knows what Cameron was doing when he pulled out of that bloc,” said Victoria Honeyman, lecturer in British politics at the University of Leeds. “Some of the people he aligned with are incredibly dangerous politically.”

To contact the reporter on this story: Kitty Donaldson in London at kdonaldson1@bloomberg.net or Robert Hutton in London at rhutton1@bloomberg.net

Last Updated: November 4, 2009 12:08 EST