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If EU leaders fail to agree a budget, it will be rolled over in 2014, and will rise by 2% to take account of inflation.
Such a scenario would mean the UK would have to pay more than under Cameron's current plan, as his calculation is based on 2011 spending.
David Cameron has told reporters in Brussels that not enough progress is being made on the EU budget negotiations. He added that unaffordable spending is being cut at home and the same needs to be done in Europe.
Arriving at the EU summit in Brussels this morning, Prime Minister David Cameron said not enough progress is being made on setting the budget.
He added: "There hasn't been enough cutting back proposals for additional spending...We need unaffordable spending to be cut."
French President Francois Hollande said it was unlikely that European Union negotiators would reach an agreement today on the budget for the next seven years but added a delayed deal would not be serious.
He told reporters: "Everyone agrees this is going to take time."
Asked whether EU leaders could fail to resolve their differences on Friday he said: "That's the most likely outcome."
German Chancellor Angela Merkel doubted whether an agreement on the European Union's seven-year budget could be reached this week and that a further round of negotiations would likely be required at a later date.
European Council President Herman Van Rompuy adjourned a summit of EU leaders to discuss a new seven-year budget early on Friday to allow time for members to study a revised set of proposals.
Officials said EU leaders would gather again at 11am GMT on Friday to open round-the-table negotiations over the long-term budget, a framework of around 1 trillion euros in spending for the years 2014-2020.
Herman Van Rompuy has issued a revised EU Budget proposal, reducing cuts to agriculture and cohesion funds. The overall budget cuts total approximately 80 billion euros.
These changes mean there are likely to been deeper cuts to EU salaries and benefits.
David Cameron today faces the start of a few busy days of negotiation on the EU Budget, with no guarantee of a deal at the end of it.
ITV News' Europe Editor James Mates reports.
Belgian Prime Minister Elio Del Rupo has said he will "plead" with David Cameron for an ambitious EU Budget.
Speaking ahead of negotiations in Brussels, he said:
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The Prime Minister's performance at this EU summit has been interesting and it hints at a more tactical engagement with Europe.
The Prime Minister has hit out at EU institutions for not going far enough to rein in spending as budget talks were postponed until January.