If the Government managed to agree a real-terms freeze in Brussels, MPs would face a stark choice between endorsing it or leaving the British taxpayer with an even bigger bill, the Deputy Prime Minister said.
The defiant comments came after 53 of Conservative MPs joined forces with the Opposition to pass an amendment demanding a cut in the EU’s funding package.
Mr Osborne admitted their frustrations were “understandable”, and reiterated that David Cameron would strike a deal at the crunch European summit next month only if it was “good for the British taxpayer”.
But Liberal Democrat leader Mr Clegg flatly dismissed the possibility that a real-terms cut could be achieved.
He said in an ideal world he would prefer a reduction in the EU budget, but the Government could not wave a “magic wand”.
“I’m the Deputy Prime Minister of a Government that’s unfortunately had to cut 20 per cent of the policing budget. Of course, I would like to see less money go to the EU budget,” he said in a question and answer session after a speech at Chatham House.
But Mr Clegg insisted the Government’s position, calling for any rise to be inflation-only – currently around 2 per cent was “by far the toughest negotiating stance of any other member state”.
He suggested getting agreement on that from all 27 countries would be a major coup, and if that happened, Parliament would be asked to confront the “real hard choices”.
Scuppering the deal in the quest for a cut would merely result in annual budget-setting, which was likely to be more expensive and the UK could not veto it, he said.
“Then I think it will be up to, particularly, the Labour Party to decide whether they are going to grow up, stop playing these playground games in Parliament and show that they are capable of making mature decisions in the national interest,” he said.
Mr Clegg also indicated that he would support Mr Cameron if he wielded the veto on a deal that was not in the country’s interests.
Speaking on BBC Radio 4’s Today programme, Chancellor George Osborne declined to say whether he believed a real-terms cut was possible.
But he said: “We are going into these negotiations with a tougher position than any British government before us.
“We will veto any deal that is not good for the British taxpayer. We will only put to the House of Commons a deal that is good for the British taxpayer.”
He said the real test would be any Commons vote on the outcome of EU budget negotiations.
“Labour took a step further away from government last night because they took such an opportunistic position,” he said.