The European Council was informally established in 1970 as an institution of the then EEC, but it did not become formally recognised until the Maastricht Treaty - Title I Article D, whence it became a formal institution of the Euopean Union. Its tasks, as set out in the Treaty, are "to provide the Union with the necessary impetus for its development" and to "define the general political guidelines thereof".
It must be distinguished from the Council of the European Union - otherwise known as "the Council", and is of course entirely separate from the Council of Europe.
As regards its formal role in treaty making, it has no competence (i.e., power) in this area whatsoever. Its sole role is to convene an IGC, which it can do by a majority decision - as Thatcher found to her cost at Milan - which is the formal body which negotiates the treaties.
What is confusing is that the European Council and the IGC have the same membership - heads of states and governments. The difference is that, constituted as the European Council, they represent the collective will of the European Union (in theory at least) while as an IGC they represent the interests of their member states.
The European Council has no formal powers to impose its decisions on member states, and its decisions are not "judiciable" under the European Court of Justice. It certainly cannot make or amend treaties, and cannot impose a treaty - or any of its provisions - on any party to an IGC.
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