Britain came under fierce pressure today to relinquish some of its cherished European Union budget rebate at a summit where the 25-nation bloc's direction is on the line.
The two-day meeting is widely seen as a test of whether the enlarged bloc can move forward after French and Dutch voters rejected a proposed EU constitution, or whether political rivalries among weakened leaders will leave it in limbo.
German Chancellor Gerhard Schroeder, fighting to cap spending to which his country is the biggest contributor, said there was no longer any excuse for the annual refund to London, worth €5.1 billion this year.
"There is absolutely no real justification for this rebate in view of the fact that Britain ranks sixth in terms of wealth per capita but way down in terms of (EU) payments per capita," he told parliament in Berlin.
Mr Schroeder said the EU's Luxembourg presidency had made sensible if not yet adequate compromise proposals, but he had little hope that all leaders would compromise for a deal.
Luxembourg offered an 11th-hour concession to Britain in a bid to clinch a budget accord that would put the Union back on track after the stunning double referendum defeat.
But diplomats said it was unlikely Prime Minister Tony Blair would accept the offer of a freezing of the rebate for the next seven years at its pre-enlargement level of €4.6 billion, linked to a promise of a future review of EU farm spending.
At the heart of the budget row is a long-standing dispute between France, which benefits most from generous EU payments to farmers, and Britain, which won a budget rebate in 1984 to compensate for the fact that it received less than others in subsidies as far fewer Britons worked on the land.
Britain finds itself in a minority of one, with all 24 other member states pointing out that it is incomparably wealthier than in 1984 and must share the costs of enlargement after the EU took in 10 poorer ex-communist states in 2004.
Some believe the bloc may be in for a period of ill-tempered stagnation and drift until its two key powers, Germany and France, have new leaders.