19/11/2011 16:13 GMT | Updated 19/01/2012 05:12 GMT

EU 2012 Budget: 2% Increase An 'Excellent Deal', Says Treasury

The Government has vowed to continue its attack on EU spending after an unexpected victory against big rises in next year's Brussels budget.

The 2012 spending plans - paid for by national EU budget contributions - were pegged at an inflation-only rise of 2% after 15 hours of gruelling negotiations which ended in the early hours of Saturday.

Euro-MPs and the European Commission had been battling for more than double the increase, but were defeated by a group of governments including the UK which insisted they would not sanction EU rises while imposing national spending cuts.

Financial Secretary to the Treasury Mark Hoban, representing the UK at the negotiations, said it was an "excellent" deal for the UK.

Now, he said, the battleground would switch to the EU's seven-year spending programme for 2014-2020 - for which the Commission has already demanding an inflation-busting 11% increase compared with last seven years.

EU Budget Commissioner Januz Lewandowski, still focusing on the 2012 deal in which the Commission lost its argument for a 4.9% rise, said the result was "clearly an austerity budget" which might mean a risk that Brussels will not have enough money to meet all its financial commitment to recipients of EU funds next year.