Summit: Cameron hails 'spectacular success' of EU budget deal

A dozen other countries backed the Prime Minister's EU summit initiative to declare the rise the maximum acceptable to the member states.

The alliance of 13 European countries, including France and Germany, is enough to block other EU leaders negotiating a bigger rise in forthcoming talks with the European Commission and European Parliament, both of which want a six per cent increase for 2011 to fund the EU.

Mr Cameron originally wanted a budget freeze, in line with belt-tightening in national budgets.

But that was never a runner and the Prime Minister insisted that preventing a negotiation above 2.9 per cent "made a real difference".

He shrugged off claims that his "breakthrough" was a rehash of a proposal by EU finance ministers three months ago to offer 2.9 per cent as a negotiating compromise.

Far from it, claimed Mr Cameron, pointing out that yesterday's 13-way summit declaration went further by declaring: "These proposals (for a six per cent rise) are especially unacceptable at a time when we are having to take difficult decisions at national level to control public expenditure.

"We are clear that we cannot accept any more than 2.9 per cent".

In other words, the six per cent plan was now "dead", Mr Cameron told a summit press conference.

He went on: "Just as at home we inherited finances that were a complete mess, so too in Brussels we have inherited a budget deal completely out of touch with the situation we face across Europe.

"I believe that as a result of Britain's intervention the spotlight has now shifted to reining in the excesses of the EU budget. At a time when we are making painful decisions at home to put our economy back on track I will not allow Brussels to derail us.

"We've prevented a crazy six per rise in the EU budget, we've made sure the budget must reflect domestic spending cuts, and we've protected the UK taxpayer from having to bail out EU countries that get themselves into trouble."

He said he was sure his dozen colleagues would be "good for their word" when negotiations begin, although he acknowledged that MEPs and the Commission would still push for a better deal.