Tony Blair has told MPs that the EU is dealing with the concerns of its people despite failing to agree on a way forward on the constitution.

Delivering a Commons statement on last week's EU Council meeting in Brussels, the prime minister said the headlines surrounding the move to to put off any decisions on the constitutional treaty had hidden progress on more practical policies.

He claimed member countries would have to come back to the EU's organisational arrangements, which were defeated in French and Dutch referendums last year, but said it was more important to reconnect with voters by showing the practical benefits of co-operation.

"It was agreed there would have to be a further period of reflection because at present there is no consensus on how to proceed," Blair told MPs.

"A Europe of 25, not 15 and soon to be 27 and in time enlarged still further, needs a modern set of rules to function effectively."

"The bulk of the conclusions of the council however, deal with the specific issues of most immediate concern to Europe's citizens," he added.

The prime minister said progress had been made on enlargement, better regulation, creating a single market for services and a common external energy policy, combating illegal immigration and climate change.

"This was a European Council which focussed on the practical, policy-driven agenda which we have long advocated," Blair concluded.

"It demonstrated yet again the benefits of positive engagement with Europe and I commend the outcome to the House."

Conservative leader David Cameron said he supported the moves on climate change and Turkish accession.

He said that enlargement should also include all of the Western Balkans, Ukraine and even Belarus.

However he criticised attempts by foreign secretary Margaret Beckett to block moves to open up EU Council meetings and warned over the dangers of handing over control of law and order to Brussels by abolishing the national veto.

And he said it was "clear after two referendum defeats that the constitution should be declared null and void".

Blair replied that "whether the constitution is dead or not depends not just on me but on the 24 other European leaders".

And Liberal Democrat leader Sir Menzies Campbell said the EU could not operate effectively "under rules designed for six" members.