Here is a tremendous opportunity. Chances to reconfigure our place in the world and to re-energise our economy come along only rarely. British policy-makers in coming years could choose to reconnect with a much deeper and less defeatist strain of thinking from our history, in which we want peaceful cooperation and will only intervene in the affairs of Europe when we have to because our interests are directly imperilled. That does not mean "splendid isolation". How could it when Britain is an open, free-trading nation with one of the greatest global cities as its capital?

It means negotiating our way to a friendly trading relationship with the eurozone, and extracting ourselves from the worst, energy-sapping elements of EU membership entirely. If the 26 get their treaty, although that will hardly be straightforward with several countries planning referendums, Europe will have been transformed. A renegotiation for Britain then becomes the natural next step.

There is no reason to suppose that this cannot be achieved if it is tackled with verve and some prime ministerial determination. Initially, there would be rancour and Britain will encounter unpopularity at summits. For instance, Cameron made great play of defending the City in Brussels, but in truth he conceded oversight last year and a slew of harmful regulation is coming London's way next year. Ultimately, though, the Germans have no interest in disrupting trade and ceasing to sell us BMWs or Volkswagens or the French their wine. As Hamish McRae points out: "The rest of Europe sells £66 billion more of goods and services to the UK than we sell to it."

New arrangements would involve a recognition of the shifting balance of power and reflect the rise of the emerging economies such as India, China and Brazil and Commonwealth countries to which the last Labour government, fixated on Europe, paid too little attention. There is an increasingly prosperous world beyond Europe's borders. With Europe in relative decline, and growth possibilities elsewhere, starting to rebalance our trade makes perfect sense.

The Foreign Office, at William Hague's insistence, has done a good deal of preparatory work on this in the last year, which is a positive amid the gloom, and Cameron has taken an interest. It will take great courage for Cameron to resist calls for a U-turn. The pressure on him to return to a more traditional pragmatic, or unprincipled, position is intense. The mandarins, blind-sided by a veto they didn't imagine Cameron would use, are working to try to regain control of the direction of UK policy. The same forces that tried to take Britain into the single currency — led by organisations such as the CBI and other representatives of the big business orthodoxy — are loudly predicting the end of civilisation as we know it.