A week or so ago, I sat metaphorically open-mouthed at a London think-tank, as a series of speakers systematically demolished all the arguments commonly advanced in support of the British-US "special relationship". What was said, in summary, was this.

Britain had to accept that she was a medium-sized power, with size, wealth and reach very different from those of the United States. The relationship would only ever become more unequal, as the US pursued global ambitions, and China hove into view. Britain's military and other capabilities would be distorted – to our disadvantage – if we tried to keep up with the US. And identifying our national interests so closely with those of the United States placed us in the demeaning position of having to change our foreign policy whenever the US elected a new administration, even though our own government was the same.

The conclusion was that our future foreign and defence policy alignment had to be with the European Union, although for the time being membership of Nato and the EU could be reconciled.

Download the new Independent Premium app Sharing the full story, not just the headlines

My general astonishment, though, was only partly a response to the arguments being set out from the platform, cogent though they were. Mostly it was because the audience, rich in frontline military, defence and diplomatic experience, and of an age to be Atlanticist by temperament, seemed to be more in agreement with what was being said than not. No one challenged the view that Britain not only had to cut its coat according to its cloth, but needed, for defence and foreign policy purposes, to be part of something bigger – and that something was probably the European Union.

In the space of a couple of hours almost every sacred defence cow was slaughtered, from Britain's moral responsibility to engage in humanitarian intervention around the globe to the expense of renewing the Trident nuclear deterrent. Our engagements in Iraq and Afghanistan were discussed not as demonstrations of our global reach, but as chastening experiences illustrating the limits of our capability. There was no suggestion that either venture should, or could, be repeated.

Many trends converge here, but together they make for a comprehensive rethink of Britain's diplomatic direction. One is certainly the missions in Iraq and Afghanistan, that have turned out to be rather more cruel than the cakewalk someone promised. Another is President Obama's tendency to see Britain as part of Europe, rather than a beloved old comrade-in-arms. But there are many others. The economic crisis, more acute in Britain than in many other countries, because of the emphasis deliberately placed on financial services, will necessitate public spending cuts from which defence and diplomacy will not be spared.

Bernard Grey's report on defence procurement – just published, after a delay – points up current extravagance, but also a future bill running into billions that not only cannot be paid, but covers advance orders that have no hope of matching long-term requirements. There are calls for more and better advance planning and for a US-style four-yearly defence review – one is already in the offing. The Prime Minister's decision to reduce our four nuclear submarines to three may, with hindsight, be seen as the point at which Britain's late 20th century ambitions began to shrink.

How far this reassessment of Britain's relations with the outside world was reflected in the front ranks of government, as opposed to the corridors of power, was nonetheless hard to gauge. Until yesterday, that is, when the Foreign Secretary, David Miliband, gave one of the most Europhile – and least Atlanticist – speeches ever delivered to a British audience by any minister since Labour took office 12 years ago.

Setting the scene for Britain to enact its foreign policy primarily through the EU, Mr Miliband effectively buried the "special relationship". He insisted that Europe was "no replacement for Britain's partnership with the United States", but everything else he said dictated otherwise. The US featured as just another big power. "Europe," he said, "is our continent."

It is tragic, of course, that just as its authority is ebbing away, this government – or at least this foreign secretary – is discovering his inner European. And while Mr Miliband's speech might have been more a personal pitch for a European job than a comprehensive reorientation of government policy, in the end it scarcely matters. What we seem to be watching is yet another lamentable piece of mis-timing.

Even as the preponderance of our diplomatic and defence establishment is accepting Europe as the logical arena of Britain's influence, we look set to vote into office a government more Eurosceptic than any since we joined the EU. At a time when Britain could have blended with the European mainstream, David Cameron is swimming against the tide of history, his only allies on the margins. The one consolation for Britain's pro-Europeans must be that, before he takes on Brussels, Mr Cameron could be heading for a train-wreck on the Europe question here at home.

m.dejevsky@independent.co.uk