LONDON, Dec 7: British Prime Minister Tony Blair defended on Wednesday his proposals for breaking the European Union budget impasse, even as his foreign minister conceded that prospects for a breakthrough were “narrow”.

Fielding questions in parliament, a week before a crunch EU summit in Brussels, Blair said Britain’s EU budget rebate would be going up, but that it was “right (and) principled” that a share of the cash back be earmarked for the 10 newest EU member states.

The rebate is actually going to increase, he said in a response to a question from the euroskeptic main opposition Conservative benches, headed for the first time by new party leader David Cameron.

The rebate will be paid in full on all the Common Agricultural Policy (CAP). It will be paid on all expenditures in the original 15 member states.

But for those who are new member states and whose economic development we support, along with their membership, it is important that Britain pay its fair share.

As he spoke in the House of Commons, Foreign Secretary Jack Straw — chairing an EU foreign ministers’ conclave in Brussels to debate the proposals — openly acknowledged that “the area for agreement is bound to be narrow”.

It was the closest any British official has gone in suggesting that an EU summit in Brussels on December 15-16, focusing on the bloc’s financial perspectives for 2007-13, was likely to fail.

European Commission chief Jose Manuel Barroso later called Britain’s proposal “unacceptable”, and called — as French President Jacques Chirac did on Thursday — for a new attempt to break the impasse.

Britain, which inherited the budget deadlock from the previous Luxembourg presidency, holds the rotating EU presidency until the end of the year, when Austria takes over.

Blair was to begin talks in London later Wednesday with counterparts from no less than eight EU member states, after discussing the proposals by telephone with Chirac and, last week, touring new EU member states in eastern Europe.

Chirac, according to his spokesman in Paris, told Blair on Tuesday that the proposals — unveiled Monday — were “a problem,” and that he should whip up some new ones that would see Britain pay more into EU coffers.—AFP