'This is 2005, not 1945': Defiant Blair takes on critics of his EU budget deal

Tony Blair signed off Britain's six-month EU presidency by sweeping aside demands from pro-European MEPs for higher European spending, and derided Eurosceptic critics with the words: "This is 2005, not 1945".

Three days after striking a deal on a budget for the years 2007-13, Mr Blair came under fire from pro- and anti-Europeans at the European Parliament, where senior MEPs hope to increase the spending totals agreed by a further €2.5bn (£1.7bn).

In a rowdy session, Mr Blair launched a verbal assault on UK Independence Party MEPs, accusing them of being stuck in the era of the Second World War.

"You sit with our country's flag. You do not represent our country's interests," Mr Blair said to a group of UKIP MEPs sitting behind Union flags. "This is the year 2005, not 1945. We are not fighting each other any more. They are our colleagues and partners and our future lies in Europe.".

The UKIP group leader, Nigel Farage, said Mr Blair was "outplayed and outclassed" by France's president, Jacques Chirac in budget negotiations, arguing he had won "game, set and match". Mr Blair described his UKIP critics as "reactionaries|".

The UK presidency of the EU ends on 31 December, and Britain has scored several successes apart from clinching the budget deal, including the opening of EU membership talks with Turkey and Croatia, an anti-terror deal on data retention and reform of the EU's sugar market.

But Mr Blair's appearance yesterday coincided with evidence that he had failed to convince British voters of the value of EU membership. A Eurobarometer survey showed that only one-third of voters - 34 per cent - believe the UK had benefited from membership, a drop of 2 per cent.

Under the hard-fought deal on EU financing, struck in the early hours of Saturday morning, Mr Blair agreed to forgo €10.5bn from the value of the UK rebate over seven years to help fund enlargement. EU leaders agreed to a budget worth €862.3bn (£584.4bn) between 2007-13.

MEPs have the power to block the EU's budget and, for the current spending plans, forced member states to increase their total spending by €2bn.

Yesterday the Austrian socialist, Hannes Swoboda, described the deal brokered by Mr Blair as "unacceptable to us in its present form". He added: "There is no agriculture reform here. On research and development, this falls far short of what we need to turn Europe into a properly competitive economy." Hand Gert Pöttering, leader of the dominant centre-right grouping in the Parliament, said the deal would now enter "a negotiation phase" with MEPs.

Senior MEPs have already discussed their tactics and are to push for an increase of €2.5bn to fund programmes on culture and competitiveness, and for more flexibility to shift resources between spending areas. In addition, MEPs will campaign for a role in a review of all EU spending to be conducted by the European Commission president, Jose Manuel Barroso, in 2008.

Mr Blair rejected calls for more EU spending saying that, until the budget structure was reformed, his deal "is the best we can achieve". The Chancellor, Gordon Brown, has failed to endorse the deal publicly. Although five Treasury officials were part of the British negotiating team in Brussels, Mr Blair did not discuss the proposed agreement directly with Mr Brown.

The Treasury has not commented on the EU budget deal, which will force it to find at least €10.5bn over seven years that has not been included in the Government's spending plans.

A Treasury source said yesterday: "Downing Street and the Foreign Office were in the lead for the Government in the negotiations. They are the ones who comment on the deal. We are not offering an alternative Treasury or Gordon Brown view."

The source denied Mr Brown was distancing himself from the deal. "We are part of the Government. It is a government deal."

William Hague, the shadow Foreign Secretary, said: "Tony Blair's presidency has ended as it began six months ago with a lively speech to the European Parliament: the trouble is so little happened in between.

"Six months after he called for a new approach in Europe there is little sign of it. Tony Blair's presidency will be remembered as the time Britain gave up £7bn without securing anything in return."

Charles Kennedy, the Liberal Democrat leader, said: "Mr Blair finalised a budget from a position of weakness, a deal which will have to be unpicked before too long. This is a short- term fix, not a long-term solution."