The sudden Anglo-French move to overturn a European arms embargo on Syria in order to equip the rebels seeking to overthrow the Assad regime has run into a solid wall of resistance at an EU summit, with the German chancellor, Angela Merkel, dismissing the policy U-turn and others warning of a regional conflagration from which Iran would emerge the winner.

Following the summit, the prime minister toned down his enthusiasm for arming the Syrian opposition, saying that he wanted the arms embargo lifted but did not necessarily want to deliver arms to anti-regime forces two years into the civil war.

David Cameron and the French president, François Hollande, had forced the issue on to the agenda of Friday's summit, on the second anniversary of the uprising. Other participants, who were not informed of the abrupt policy shift, were stunned at the attempt to overturn EU decisions on the sanctions regime against Syria agreed only a fortnight ago.

Catherine Ashton, Britain's EU commissioner in charge of foreign and security policy, knew nothing of the change until she read about it in the newspaper, according to senior sources, and responded to the Anglo-French initiative by laying out the "pros and cons" of a lifting of the ban. "There were not any pros," said an EU source.

Merkel said Ashton told the summit that lifting the embargo would trigger a regional arms race in Syria from which Iran could emerge as the real victor. The Austrian chancellor, Werner Faymann, bluntly opposed lifting the arms ban and warned that he would order the withdrawal of hundreds of Austrian UN forces from the disputed Golan Heights between Syria and Israel if the European consensus shifted.

The Dutch foreign minister wrote to the Dutch parliament also criticising the Anglo-French move.

"We have a number of concerns," said Merkel. "One has to ask if it does not fan the flames of the conflict."

The German leader has clearly been surprised by the swiftness of the Anglo-French change. EU foreign ministers met in Brussels last Monday, with the UN envoy on Syria, Lakhdar Brahimi, attending. Neither the British nor the French raised the demands for lifting the embargo then.

"Just the fact that two have changed their minds doesn't mean that the other 25 have to follow suit," said Merkel.

Meanwhile, in Syria the head of the main rebel group pledged to fight until the "criminal" regime was gone.

General Salim Idris, the head of the Supreme Military Council, called on Syrian soldiers to join the rebels in a "fight for freedom and democracy" in a video obtained by the Associated Press.

Authorities in Damascus increased security for the anniversary, as rebels vowed to intensify attacks on government troops and state institutions.

A fortnight ago EU foreign ministers loosened the embargo terms under British pressure to allowed the supply of more than "non-lethal" equipment to the forces fighting Bashar al-Assad. Last Tuesday, in response to a question in the House of Commons, Cameron talked for the first time of lifting the embargo.

At Friday's summit he contested arguments that arms supplies would go to the wrong people, saying "that is what has happened already" and queried whether arming the opposition would hamper the prospects of a political settlement. But he added: "I'm not saying that Britain would like to supply arms to rebel groups. We want to work with them and make sure they're doing the right thing."

International policy on Syria was not working, the prime minister added, dismissing the objection that Britain would be bound by EU decisions on sanctions. "If we want to take individual action we are free to do so," he said.

The arms embargo treated both sides to the conflict equally and wrongly, the prime minister said. "Shouldn't we be sending a clear signal of difference?"

The dispute is to be discussed by EU foreign ministers in Dublin next week, with London and Paris pushing for what will probably be an unobtainable consensus to change the EU embargo by May.

The question then will be whether France and Britain ignore EU policies they are signed up to and go ahead with the supplies. They ignored EU policy-makers over Libya two years ago and more recently in France's British-supported invasion of Mali.