Britain will remain a major world power, says Premier

Britain will remain a "major player" on the world stage, despite the need for savage defence cuts and the rise of competing economic powers like China and India, David Cameron promised last night.In his first Mansion House speech on foreign policy, the Prime Minister dismissed suggestions that the UK was on an "inevitable path of decline" but admitted the country's position globally would be undermined unless its finances were put in order.

"When some people look at the world today they are quick to prophesy dark times ahead; difficulties for Britain," he said.

"Our foreign policy runs counter to that pessimism. We have the resources – commercial, military and cultural – to remain a major player in the world.

"We are choosing ambition. Far from shrinking back, Britain is reaching out. And far from looking back, starry-eyed, on a glorious past, this country can look forward, clear-eyed, to a great future."

Mr Cameron, who has just returned from visiting China and the G20 in Seoul, insisted the UK remained a "great economic power" and that he was determined to ensure that foreign policy would "focus like a laser on defending and advancing Britain's national interest".

Turning to the country's economic position, he said paying down record deficit was "as important a foreign policy priority as it is a domestic one".

"We need to sort out the economy if we are to carry weight in the world. Economic weakness at home translates into political weakness abroad," he added. Despite the defence cuts, Mr Cameron said Britain still had the world's fourth-largest defence budget and was one of only a handful of countries capable of deploying "serious military power" around the world.

But Labour claimed Britain had played a diminished role in international affairs since the coalition came to power. "David Cameron is playing the spectator not the statesman on the international stage," said Shadow Foreign Secretary Yvette Cooper.