David Cameron has threatened to veto the European Union's seven-year budget plans next month unless fellow EU leaders agree to freeze spending.
The Prime Minister, who angered other EU nations by vetoing a fiscal pact to help rescue the eurozone last December, said yesterday he is prepared do the same again when the leaders discuss plans to boost the EU's budget by up to five per cent at their next summit.
Speaking in Brussels, Mr Cameron said: "It just would not be acceptable to see a huge increase in EU spending at a time when other budgets are being cut. The British public expect a rigorous approach and that is exactly what they will get. If there isn't a deal that is good for Britain, if there isn't a deal available then there won't be a deal."
Britain and Germany are among countries calling for a budget freeze from 2014-20. But the European Parliament wants a five per cent rise and the European Commission is proposing to split the difference.
Mr Cameron argued that Commission plans for a new euro-area budget as part of fiscal union should allow a smaller budget for the 27-nation EU – a view not shared by several other leaders.
He claimed that 16 per cent of European Commission staff earn more than €100,000 a year (£81,378). Commission sources said this figure related only to 12,000 higher-level staff. But a British official insisted that the average salary across all 55,000 EU staff was €102,000.
The Prime Minister was speaking at the close of a two-day summit at which some of his European counterparts expressed fears that Britain was in the process of waving goodbye to the EU. Alexander Stubb, Finland's Europe Minister, said that Britain had "voluntarily put itself in the margins".
Mr Cameron denied the claim, insisting Britain was "at the heart" of the European single market and remained "a very, very important and influential player" in the EU.
While saying that leaving the Union would not be "in our national interest", he raised the prospect of a referendum on Britain's relationship with the EU, saying: "The plates of Europe are moving and changing. Just as the eurozone is changing, and there are fresh settlements there, so here are fresh opportunities for Britain as well."