David Cameron ready for fight on EU budget

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The Prime Minister will give a hint of his tactics at an EU summit tomorrow when leaders will be considering proposals for both an emergency treaty and a six per cent rise next year in its budget.

Sources close to the Prime Minister say he is prepared to link the two issues together if necessary, resorting to the kind of tactics that have long been employed by France to get its way but usually disdained by British diplomats.

Officially, there is no connection between the treaty, which is being proposed to restore stability to the eurozone of single currency countries, and the EU budget, which is set separately.

However, a source said: "We will look at whatever leverage we have available to us to get the right outcome for the UK."

Britain is outside the eurozone and so would not be directly affected by any treaty. However, unanimity rules mean that Mr Cameron has veto powers which he apparently intends to exploit to squeeze the budget.

Last week he said a vote for a six per cent rise was "outrageous" at a time of austerity elsewhere.