It is "absolutely ludicrous" for the UK to go to Brussels intending to veto the EU budget, Ken Clarke said on Friday.
The Cabinet minister added that such a position would be "absurd".
He was speaking after prime minister David Cameron said last night that he would veto the financial package if it was not a good deal for Britain.
"It's absolutely ludicrous to go there intending to veto," Clarke said. "It's just absurd."
Speaking after an event at the Policy Exchange think-tank in central London, the minister without portfolio went on:
"Every one of the 27 member states has a veto. What they've got to do is reach a negotiated situation.
"Of course people have a veto.
"Any government will veto it if it goes too far in one direction or the other.
"The Commons vote doesn't tie anybody to anything."
Cameron said he would listen very carefully to Parliament after Tory backbenchers inflicted a stinging defeat on the coalition over the EU budget.
But the prime minister insisted the government was taking the toughest ever approach to the negotiations over how much Britain paid to Brussels.
"Of course I will listen carefully to Parliament but we should be absolutely clear this government is taking the toughest approach to the EU budget of any government in this country's history," he told a Downing Street press conference.
"If we don't get what I consider to be a good deal for Britain, I have no hesitation in vetoing the multi-financial package."
Cameron was subjected to a humiliating Commons defeat on Tuesday, with Tory rebels joining Labour in rejecting a plan to go along with an inflation-level EU budget increase.