The events of September 11 have only temporarily mended cracks in the relationship between Europe and America, Lord Ashdown warned on Tuesday.

Speaking at the Royal Institute for International Affairs, the former leader of the Liberal Democrats called on the government to do more on defence issues, instead of focusing on "bread and butter [trade] issues on which jobs and livelihoods depend."

The introduction of the European single currency would also cause divisions between Britain and the United States, he said.

"It is simply inevitable that the competition for spheres of influence and trading advantage between these two is bound to increase - unless we can provide a framework which manages that competition and guards against outright confrontation," he said.

"Simply standing shoulder to shoulder with the US can, unless properly anchored in a European context, lead to Britain being put into a kind of zero sum choice between one side and the other.

"We can bumble along as we are, in which case we will, at best - and probably diminishingly - be fair weather friends. Or we can start the hard and difficult business of converting the most successful military alliance in history into a global partnership for the future," he said.