Britain under fresh attack in EU funding row

The British tactic has been to try to delay detailed negotiation on numbers until December, in the hope that the different sides will feel under pressure to compromise when up against a tight deadline.

Yesterday, with just six weeks to go until December's crunch summit, the UK tabled only a general paper, and insisted that, if a deal was to be achieved, other parties had to move from proposals which were rejected by Tony Blair at a fractious summit in June. At that meeting, Mr Blair refused to compromise on the British budget rebate, worth about ¤5bn (£3.4bn) a year, unless there was a pledge to reform the EU's agricultural policy further.

Technically known as the abatement, the rebate, negotiated in 1984, was designed to compensate the UK for relatively low receipts from the Common Agricultural Policy. Philippe Douste-Blazy, the French Foreign Minister, went on the attack against the rebate, arguing: "We must modify the system, if not, France, Italy and Spain will pay more for the cost of enlargement [of the EU]."

M. Douste-Blazy added that the further the new proposals were from those rejected by the United Kingdom in June "the more difficult it will be", since that blueprint represented the "outside limit" of what France could accept.

He also launched a scathing attack on Peter Mandelson, the EU's trade commissioner, saying that his description of France as isolated on global trade negotiations was "false".

M. Douste-Blazy suggested that Mr Mandelson's offer in World Trade Organisation talks to cut EU farm tariffs had exceeded his mandate.

On the rebate, Mr Straw hit back, arguing: "We have been big payers, over the years, even with the abatement, significantly larger ­ by a very big margin ­ than France or Italy, over the past 20 years. Even if there were no change in the abatement, our contribution would still increase. What we are talking about, therefore, is the size of any increase."

However, the gulf between the UK and France was reflected in gloom from other member states, many of whom identified the UK's position on the rebate as a central problem. Dermot Ahern, the Irish Foreign Minister, described the British budget rebate as the "big elephant in the background", but suggested that the Government was "not really" moving on the issue. He also described British proposals to shift cash from the Common Agricultural Policy as "unhelpful".

Spain's Foreign Minister, Miguel Angel Moratinos, said that the British presidency should take note that "if they want an agreement [in December] they will have to change their position". He added that, for a deal to be clinched, discussion had to move on from "philosophical points", to "more positive aspects".

Later this month the UK will put forward new proposals likely to include a review clause under which EU farm spending could be reconsidered midway through the next funding period. But figures will probably not be produced until December. That approach may frustrate some member states, including the new EU nations which feel that subsidies will be endangered if there is no deal on the financial package.