George Osborne tells Europe: Hands off UK budget rebate

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Before a meeting with fellow European finance ministers, Mr Osborne told the Standard he would not tolerate fresh moves to abolish the UK rebate secured by Margaret Thatcher in the Eighties.

He hit out after European Commissioner for the Budget, Janusz Lewandowski, suggested that the time had come to end the UK deal. Mr Lewandowski said: "The rebate for Great Britain has lost its original justification. Per capita income in Britain has risen substantially since the Eighties."

Mrs Thatcher secured the payback in 1984 when she told startled fellow European leaders: "We are simply asking to have our own money back."

Mr Osborne said today: "The rebate is fully justified. Without it, the UK would be paying a net contribution twice as much as France. The real issue is reform of a budget where 40 per cent goes on the Common Agricultural Policy."

Over the next few years the British contribution to the EU budget will almost treble. According to figures published by the Office for Budget Responsibility, the UK's net contribution will rise from £3 billion last year to £8.2 billion by 2015.

When government departments are facing cuts, Tory MPs point out that the EU is the area of spending that will rise the most over the life of the Government.