[Scarlett.]

French President Nicolas Sarkozy has admitted that the European Union is now a two-speed alliance, but insists that Britain won't be forced out of the bloc's single market.

Sarkozy and German Chancellor Angela Merkel fell out with Prime Minister David Cameron at least week's EU summit, when London refused to sign up to a pact imposing closer economic co-ordination between member states.

In an interview with the French daily Le Monde, Sarkozy says he and the chancellor did everything to allow the British to take part in the agreement, but there are now clearly two Europes.

But, asked whether Britain could still remain inside the EU single market, he said Europe needs Great Britain and would be greatly impoverished if it was allowed to depart.

Sky News Australia

Finally they own up that they actually need us