New members review relations with Britain after rebate row

Britain's most dependable EU allies - the former Communist countries of Eastern Europe - are reassessing their alliance with Tony Blair after he blocked an EU budget due to bring them billions of euros to revive their economies.

Britain's most dependable EU allies - the former Communist countries of Eastern Europe - are reassessing their alliance with Tony Blair after he blocked an EU budget due to bring them billions of euros to revive their economies.

Britain was one of the strongest supporters of last year's EU expansion, and its free-market instincts and transatlantic outlook made the UK a natural ally for eight East European nations that joined the bloc last May.

But so desperate was Poland to get an agreement on the funding package for 2007-13 that its Prime Minister, Marek Belka, even offered to sacrifice some of his receipts to help clinch a deal.

Yesterday Poland's European affairs minister, Jaroslaw Pietras, said there was now "a risk the funds Poland gets will be less than expected," adding a thinly veiled criticism of the UK.

"This risk," he said, "has been made greater by the fact that the large, rich member countries weren't prepared to budge an inch on the amount they want to pay into the EU budget."

Hungary's European affairs minister, Etele Barath, warned that a blockage over spending plans for 2007-13 would lead to "extremely serious consequences". He added that failure to clinch a deal would lead to "a period of constant conflicts".

The budget is crucial to the new countries because 2007 is the point at which they step up from a transitional phase of membership to receiving a massive influx of cash. Full structural-fund receipts are expected to be worth around 4 per cent of gross national income after 2007 and Poland alone could receive more than €80bn (£53bn).

The alarm among the new member states has cast a cloud over the British presidency of the EU, which starts next week, because it has complicated ties with countries that could be relied on to line up with London against Paris. The French President, Jacques Chirac, has done his best to exploit the newcomers' dismay at Britain's position.

Hungary, which now has the presidency of the Visegrad Group, which includes Slovakia, Hungary, Poland and the Czech Republic, plans to increase the pressure on the British presidency by starting talks on an initiative on the budget. Mr Barath said the group "has ample munitions to facilitate a compromise" and that it will start to do so "following the start of the British presidency."

Meanwhile, another ally of Mr Blair, Ireland's premier, Bertie Ahern, criticised Britain's position on the rebate and its opposition to the CAP. In an article in the Irish Independent, the Taoiseach said that: "any rebate mechanisms for countries which are net contributors to the EU budget should be kept within a reasonable ceiling".