British PM David Cameron says he will not accept an European Union budget deal unless further cuts are made in negotiations in Brussels.
EU leaders are gathering for a two-day summit to try to strike a seven-year spending deal, after a previous meeting in November failed.
But David Cameron said the figures being proposed “need to come down. And if they don’t… there won’t be a deal”.
The European Commission head called for “a spirit of responsibility” in talks.
Jose Manuel Barroso said: “Further delays will send out a very negative message at this time of fragile economic recovery. The risk is that positions will harden and will be even more difficult to overcome.”
The formal meeting has been delayed by several hours, apparently to allow more time for discussions on a compromise.
David Cameron has met his counterparts from Denmark, the Netherlands and Sweden – leaders who are potential allies in the tough negotiations.
High EU expenditure at a time of cutbacks and austerity across the continent is the main issue dividing the 27 member states.
The Commission – the EU’s executive body – had originally wanted a budget ceiling of 1.025 trillion euros ($1.4 trillion) for 2014-2020, a 5% increase. In November that ceiling was trimmed back to 973 billion euros, equivalent to 943 billion euros in actual payments.
But with other EU spending commitments included, that would still give an overall budget of 1.011tn euros.
The UK, Germany and other northern European nations want to lower EU spending to mirror the cuts being made by national governments across the Continent.
An EU source says any extra cut would probably be made to growth-related spending in areas such as energy, transport, the digital economy and research.
The biggest spending areas – agriculture and regional development – are largely ring-fenced because of strong national interests, the source said, speaking on condition of anonymity.
Whatever is agreed has still to go to the European Parliament, and MEPs are big backers of EU spending.
Scheduled to begin at noon on Thursday, the summit has been put back to 19:30. “We needed more time to work on the compromise proposal,” an unnamed EU official told AFP news agency.
A grouping led by France and Italy wants to maintain spending but target it more at investment likely to create jobs.
The split in the EU reflects the gap between richer European countries and those that rely most on EU funding.
The argument for higher spending is supported by many countries that are net beneficiaries, including Poland, Hungary and Spain.
Others, mostly the big net contributors, argue it is unacceptable at a time of austerity.
Germany, the UK, France and Italy are the biggest net contributors to the budget, which amounts to about 1% of the EU’s overall GDP.
Analysts say failure to reach an agreement on its seven-year budget would mean the EU falling back on more expensive annual budgets.