David Cameron arrived in Brussels for marathon EU budget talks this afternoon insisting the negotiations were "going to be difficult" but a deal was "doable".
The prime minister is adamant there would be no deal unless the cost of running Europe for the rest of the decade comes down.
Downing Street said on Thursday morning there were "like minded" countries in Northern Europe, including Germany, the Netherlands, and Denmark who wanted to see a reduction in costs.
On the table is a seven-year budget plan the prime minister has warned he will flatly reject unless he sees savings which show the EU is sharing the pain of the austerity measures being taken back home.
He walked into the summit building with a curt declaration amounting to a direct challenge to those warning that the EU must have a big enough budget to foster jobs and growth and meet the costs of policies requested by EU leaders themselves.
"The numbers are much too high. They need to come down - and if they don't come down there won't be a deal," said the prime minister.
He added: "The European Union should not be immune to the sorts of pressure we have to reduce spending, find efficiencies and spend wisely - what we are all doing."
As he arrived, the official summit start time was put back to give more time for behind-the scenes efforts to reach a compromise - although there was little sign that gaps have closed since a first round of budget talks collapsed last November.
On that occasion Cameron and other major contributors to the EU kitty rejected a cut from a planned spending package of about one thousand billion euros (£860bn) for 2014-2020 to about £756bn.
Today German chancellor Angela Merkel arrived for the latest effort to reach a deal admitting that national positions remained "far apart".
And French president Francois Hollande went in saying compromise was needed, but making plain cuts in EU agriculture spending - from which France benefits hugely - were not on his negotiating agenda.
"We must not weaken the (EU) economy." he said. "I am here for agreement, if a deal is reasonable. Europe must find compromise, but must maintain growth and solidarity."
Spending cuts targets for the UK include the farm budget - which absorbs 40% of the entire annual European budget, mostly in the form of direct subsidies to farmers - and administration costs for running the EU institutions.
Cameron has warned that the public will not understand if the EU maintains a budget - paid for by the Treasuries of the 27 member states - which does not reflect the kind of belt-tightening being imposed at national level.
But his call for cuts in the size of the well-heeled EU civil service have irritated Brussels, with Commission president Jose Manuel Barroso insisting that the EU budget holds the hope of fostering jobs and growth at a time of austerity for the benefit of all.
Since the last budget talks broke down Cameron has made his pitch for "a new settlement" between the UK and the rest of the EU, with the repatriation of powers and, ultimately a referendum on whether to stay in the EU or leave.
The development has done nothing to improve the chances of Cameron getting the scale of financial cutbacks at EU level that he is demanding - although British officials in Brussels insist the attitude towards Britain has not been damaged.
Before the summit got under way Barroso said all of the EU had to be ready to negotiate "in a spirit of responsibility".
"Further delays will send out a very negative message at this time of fragile economic recovery. The risk is that positions will harden and will be even more difficult to overcome."
But the 27-way negotiation was pushed back further this afternoon, with a second delay announced while efforts continue to avoid an embarrassing stalemate when the leaders finally get together later.