TALKS have broken down in Brussels after MEPs refused to drop demands for an extra €17.25bn in EU spending for this year and 2013.
Last month, the European Commission demanded a €9.1bn spending increase by the end of this year to meet a funding shortfall. However, its figures are disputed by several governments.
At the same time, the European Parliament voted to reinstate more than €8.1bn in funding that had been cut by governments from next year's budget to reflect national austerity programmes.
Negotiations were suspended last night after MEPs walked out of talks because governments -- led by Britain, the Netherlands and Germany -- resisted the commission's demand for extra cash this year.
The two demands, for this year and next, would increase Britain's EU contributions by €2bn at a time of deep cuts to public services in that country.
During acrimonious negotiations that lasted eight hours, Greg Clark, the financial secretary to the British Treasury, attacked the commission for asking for an extra 9.65pc in funding for this year -- almost 11 months into 2012.
"Europe must practice the fiscal discipline that it demands of member states," he said.
"Ordinary working people, in the UK or elsewhere, cannot be asked to pay more to Europe when they are enduring cuts at home. We want to see the annual budget cut in real terms and certainly not increased. That remains our view for 2012 and 2013."
The negotiations had been scheduled to finalise spending for 2013 but talks broke down before they had even begun over an amending budget for this year.
The stalemate bodes badly for a Brussels summit on the EU's long-term financing in two weeks.
Alain Lamassoure, the French MEP who heads the European Parliament's budget committee, said that governments "were unable to negotiate so the negotiations were suspended".
"The European Commission will now have to present a new proposal to enable talks to resume," he said.
Jeroen Dijsselbloem, the new Dutch finance minister, said he did not believe the commission's claim that the EU would be unable to pay its bills without the extra money.
"I'd question that very much," he said. "The Commission has to re-prioritise, that's just the way it is. Budgetary discipline is not just for the member states."
Peter Tempel, Germany's permanent representative to the EU, echoed British and Dutch complaints.
"We take the view that implementation of the budget in 2012 is not a basis for claims made by the Commission," he said.
Talks could resume on Tuesday. (© Daily Telegraph, London)