Last night, the EU Commission didn’t commit to saving a single €. That’s why there is no deal and we will continue to negotiate on this.
David Cameron has said that EU institutions must adjust to the "real world" by accepting the sorts of cuts that many of its member states have accepted.
He said: "We are not going to be tough on budgets at home just to come here and sign up to big increases in European spending."
Mr Cameron said he was confident a deal is still "do-able" but insisted it would not be "at any cost".
David Cameron signed off from his press conference saying that although no deal was reached, they stopped something "unacceptable" from happening. "In EU terms, I think that goes down as progress," he added.
David Cameron said today the Brussels summit had broken up without an agreement on the EU budget because the deal on the table was "just not good enough".
He said he had rejected an attempt to commit taxpayers to real-terms increases in EU spending and had protected the British rebate.
He stressed that Britain was not acting as a "lone actor" and that other countries shared its stance.
The German Chancellor Angela Merkel has said there is real potential for an agreement on the EU budget at the beginning of 2013.
The president of the European Council Herman Van Rompuy has confirmed that negotiations on the EU budget will recommence early next year.
He described the discussions as "constructive" and said he believed there was a "sufficient degree of potential convergence" to make an agreement possible.
He said the failure of the present talks to reach agreement should not be "dramatised" and that such negotiations "generally take two goes".
It seems Europe's leaders have thrown in the towel for now. No sign of a deal and the weekend awaits. Try again in January?
The EU budget summit of 27 leaders has been called off, an EU diplomat told Reuters.
As negotiations continue in Brussels on the future of the EU budget it appears that politicians are no closer to reaching a deal. ITV's Political Correspondent Libbey Wiener reports on the division at the heart of the EU.