We propose and analyze a counterpropagating cladding mode assisted tunable frequency Fabry-Perot interferometer formed by a Bragg grating (BG) cavity in a liquid crystal coated planar optical waveguide. A full vector modal analysis has been used to obtain the transmission spectra of the individual Bragg reflectors, and the cavity effects have been incorporated by employing a suitable phase matrix. We show that the cavity resonances that appear from two fiber BGs forming a resonator can be efficiently explained by incorporating appropriate phase shifts in one BG grating period. We further show that utilizing the cladding mode evanescent field, a liquid crystal overlay can be used to tune the cavity resonance over the entire free-spectral range of the cavity transmission spectra. Our study should find application in designing highly tunable integrated optical Fabry-Perot interferometers.