European Union president Britain came under renewed pressure on Tuesday to secure a deal on the bloc's long-term budget in December, but diplomats were increasingly pessimistic about a possible compromise.
France again urged Britain to accept a cut in its contested rebate from Brussels coffers to pave the way for a budget deal at the EU's summit in mid-December, which diplomats say is key to restoring confidence in the bloc after recent setbacks.
But French European Affairs Minister Catherine Colonna said the agreement on the 2007-2013 budget should not involve cuts in farm subsidies, of which France is a major beneficiary.
Negotiations on the budget collapsed in acrimony at a June summit after Britain refused to agree to any curb on its annual rebate unless it won a pledge of future cuts in farm subsidies.
"The key to negotiations is not the common agricultural policy," Colonna told LCI television in an interview from Brussels. "The key to negotiations is the British rebate."
Britain says its rebate, originally secured in 1984 and worth 5.6 billion euros ($6.6 billion) this year, is justified as long as the budget is dominated by farm spending and regional aid, little of which goes to London.
British Prime Minister Tony Blair reiterated that view on Tuesday. But Britain has said a deal is still possible and Blair plans a charm offensive in east European capitals this week.
He will meet leaders of Estonia, Latvia and Lithuania in Tallinn on Thursday and then see his counterparts from the Czech Republic, Hungary, Poland and Slovakia in Budapest.
The EU's 25 nembers keenly await Britain's compromise proposal, due to be unveiled in early December, but diplomatic leaks that London wants to slash spending on the poorest regions have irked the bloc's new members from eastern Europe.
Hungary joined Poland on Tuesday in protesting against London's reported plans, which according to diplomats would cut spending significantly, partly by reducing regional aid to east European countries that joined the EU last year.
"What ... Blair is now proposing is unacceptable ... It is so far from Hungary's interests that let's put it simply: no," Hungarian Prime Minister Ferenc Gyurcsany told public television.
He said EU newcomers should perhaps wait until the Austrian presidency of the bloc in the first half of next year for a budget deal, if Britain indeed proposed budget cuts.
"Perhaps the Austrian presidency is more appropriate for this than the kind of empathy which Britain is now showing when handling the problems of the new members," Gyurcsany said.
Belgium said divisions over the budget and the way Britain was handling negotiations boded ill for any deal in December.
"The British (presidency) has already said they want a fundamental review of the European budget but they only want to release their plans one week ahead of the mid-December European summit. Basically, they are admitting they don't want to reach a solution at this time," he told Humo weekly in an interview. The executive European Commission has warned the failure to agree on the budget would plunge the EU deeper into crisis, showing the bloc is still paralysed after France and the Netherlands rejected its constitution in referendums.