Britain threatened today to veto moves to end its multi-billion euro EU budget rebate, saying its cherished payback could only be discussed as part of a broader overhaul of European Union spending.
Chancellor of the Exchequer Gordon Brown, Britain's finance minister, said Britain was not prepared to put its rebate on the table as part of horse-trading over the bloc's long-term budget ahead of an EU summit next week.
French President Jacques Chirac and German Chancellor Gerhard Schroeder were expected to increase pressure on Britain to climb down over its €4.6 billion annual rebate at a news conference today after talks in Paris.
Mr Chirac and Mr Schroeder, meeting for the second time in a week, have called for London to agree to reduce and eventually give up Britain's rebate in order to clinch agreement on the EU's 2007-2013 spending plan.
Prime Minister Tony Blair said Britain could only contemplate reviewing its rebate if the funds were discussed as part of a much wider debate on financing in the bloc.
"If you have a fundamental review of how Europe spends its money, then everything is open to debate," Mr Blair told reporters.
Then Prime Minister Margaret Thatcher won the rebate in 1984 when Britain was one of the poorest EU countries and got little back from Brussels in farm subsidies.
This was at a time when farm subsidies made up 75 per cent of the EU budget compared to 43 per cent at present.
Earlier, Blair's finance minister Brown took a tougher line on BBC radio: "We are not going to negotiate away the rebate. That is simply not up for negotiation.
"We have said very clearly that not only is the rebate justified, but if in the national interest it was necessary to do so we would have to use our veto," Mr Brown said. The row is overshadowing a June 16th-17th Brussels summit also due to discuss French and Dutch voters' rejection of the EU charter.