The Prime Minister has ruled out paying the EU requested after it looked again at economic performance of its member states.
In a press conference yesterday Mr Cameron made clear he would not be handing over the cash by the December 1 deadline set by the EU, but has not yet completely ruled out repayment.
The surcharge - which would add almost a fifth to the UK’s annual contribution of £8.6bn - is intended to reflect Britain’s better-than-expected economic performance relative to other EU states.
Last night it emerged Tory MP Sir William Cash would be bringing the Treasury before his Commons European Scrutiny Committee next week.
Sir William said: “I expect a Treasury Minister to appear before the Committee early next week to explain how long the Government has known about the proposed increase, what it has done about it, and what immediate action it now intends to take.”
While Ukip leader Nigel Farage was enjoying watching the PM face a new EU problem, Tory politicians were lining up to urge a defiant performance from Mr Cameron.
Conservative former Cabinet minister John Redwood said Mr Cameron should refuse to pay - and should amend the law if necessary to make clear the UK regards the demand as “illegal and unacceptable”.
Mr Redwood said: “This is a very large increase in tax on the British people, imposed retrospectively without their permission.
“It offends all our principles of natural justice and fair taxation. The British people are already paying too much tax and he last thing they intend to do is sent another £1.7 billion to the Commission so that they can behave in the way they just have overnight.”
Backing the need for a tough stance was Alec Shelbrooke, the MP for Elmet and Rothwell, who said: “This latest EU saga, caused by Gordon Brown’s signing of the Lisbon Treaty shows once again why we must have a referendum on our membership of the EU.
“As the Conservative Party is the only party capable of delivering this, a vote for anyone else would be tacit approval of this daylight robbery.”
The Mayor of London Boris Johnson said: “The Prime Minister is absolutely right to build a consensus among our European allies on this - it’s EU bureaucracy gone mad.
“If ever there existed a reason for fundamental reform of the EU here it is.
“Suddenly demanding at a moment’s notice a £1.7 billion surcharge simply because Britain has outperformed other EU countries is ludicrous and completely unacceptable.”
Conservative MEP Daniel Hannan said: “The extra money being demanded by Brussels - just the extra - would allow us to hire an extra 60,000 nurses and fund their pensions.”
But Shadow chancellor Ed Balls said Mr Cameron must have known about the surcharge for “weeks and weeks and weeks”.
Mr Balls said the demand for a top-up payment was “unacceptable” and told the BBC: “It is unacceptable it’s just been sprung upon people in this way.”
He added: “I’ve got to say what has our Prime Minister been doing? I mean, how could he suddenly be surprised about this, surely the Treasury has known about this for weeks and weeks and weeks?
“The Prime Minister is now apparently claiming he wants to have a meeting of finance ministers in a month’s time. He should have had that last week.
“I want this bill to come down, I think a deal should be struck. I think a Labour government, in a hard-headed way, would pursue the national interest and build alliances.
“Our problem is that David Cameron now is isolated, one foot out of the door, ignored, and therefore he’s not getting the kind of good deal for Britain on immigration control or on the single market or now on the EU budget.
“You can’t have a Prime Minister who is ignored in Europe without the national interest suffering.”
Preliminary figures suggest that Britain is facing by far the biggest top-up, while the Netherlands is being asked for an extra 642 million euro (£506 million).
By contrast, Germany receives a rebate of 779 million euro (£614 million), France one billion (£788.7 million) and Poland 316 million (£249 million).
Mr Cameron told out-going European Commission president José Manuel Barroso that the official had no idea of the impact the demand would have.