French deal means David Cameron says ‘oui’ to Europe

I joke that he has to run for leader of the Conservative Party as he is the closest they have to Tony Blair. I add that once elected, he will have to kill some sacred cows, and suggest the Euroscepticism that had done so much damage to John Major's government might be sacrificed.

"Hmm," replied Cameron. "I'm more Eurosceptic than you imagine, Denis." Not any longer, he isn't.

Yesterday's breakthrough deal with France on defence crowns the change in strategic policy initiated by Blair when he signed the St Malo accord with Jacques Chirac in 1998. That highlighted the need for Europe to work towards a common defence profile. Yesterday it became reality as Britain and France agreed a wide range of policies.

Europe always starts with one or two countries agreeing a common policy, which then leads to much greater integration. France and Germany locked their currencies together in 1984. Fifteen years later the euro was born.

The Franco-British deal has the same long-term implications for the defence profile of the EU's 27 nations, most of which are also in Nato. The US will also welcome the Cameron-Sarkozy agreement.

In September, Hervé Morin, France's defence minister, expressed concern that Europe would become a "protectorat" controlled by a "Chinese-American condominium". For France, the deal with Britain is precisely to reassert its European leadership on defence matters.

Nicolas Sarkozy's decision to bury Gaullist nationalism and re-enter Nato removed one obstacle. The need to cut the deficit gave policymakers in the UK the chance to nudge Cameron towards a common defence stance.

As with last week's agreement to a rise in the EU budget, and his repudiation of a referendum on the new EU treaty, Cameron has moved from Thatcher's "No, No, No" to Blair's "Oui, Oui, Oui" in six months.

He knows his history. When Argentina invaded the Falklands, Washington sided with the military junta. The first call Mrs Thatcher got from a foreign leader was from French president François Mitterrand, who offered to provide all the secrets of the Exocet missiles used by the South American nation. Britain has always needed European help.

Each French president addressing Parliament has to look at a picture of Waterloo in the Lords. It shows Wellington shaking hands with Blücher, the Prussian general who saved the day. Now a UK premier has shaken hands on a unprecedented deal with a French leader to change Britain's defence policy in a European direction that, pre-election, no one would have thought possible.

Up to May, Cameron fed his MPs the red meat of Euroscepticism, and neo-conservative jokes about French reliability on matters military. The journey from Agincourt to Euro-alliance — as Cameron moves from Henry V to Francophile-in-chief — may be hard for Tory MPs to swallow. But their leader is now as European as ever Tony Blair or even Edward Heath was.

Denis MacShane is Labour MP for Rotherham and was Europe minister from 2002 to 2005