The immediate cause is Danish legislations concerning immigration that runs afoul of EUnion directives. Gates of Vienna is covering the story in detail. Relevant posts (in chronological order) are linked to below:
Jul 29 The EU Lays Down the Law
Jul 31 Denmark’s Answer to the EU
Aug 1 The No Longer Forbidden Debate in Denmark
Aug 4 Who Rules in Denmark?
Aug 6 Danish Immigration Policy Capsized
Aug 7 The EU Puts Denmark on Trial
And the latest news is that faced with general opposition to the EUnion growing in Denmark, PM Rasmussen does what any self-respecting EUrocrat does under these circumstances: Cancelling the referendum on the