EU summit deadlocks over budget cuts

A special summit of European Union leaders in Brussels aimed at reaching a deal on its next seven-year budget ended in stalemate after an alliance of the EU's richest countries, led by Britain and Germany, declined to accept a €973 billion ($1.26 trillion) budget.

European Council president Herman Van Rompuy declared the talks as closed after the main "contributor" nations and main "beneficiary" nations failed to resolve their differences.

The negotiations will probably resume only in the New Year, although British  prime minister David Cameron suggested that the talks continue over the weekend despite the row over the overall budget.

Dutch prime minister Mark Rutte insisted on a €100 billion reduction on Van Rompuy's €973 billion budget while Cameron, German chancellor Angela Merkel and Swedish prime minister Fredrick Reinfeldt were keen on a minimum €50 billion budget cut.

Rompuy earlier presented to the EU leaders a revised draft budget, which envisages cuts of €80 billion against the European Commission's original proposal of €1.011 trillion ($1.25 trillion), bringing down the total allocation to €973 billion.

Merkel was keen to see further cuts on the Van Rompuy proposal, though she would have accepted more modest cuts.