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".
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.
Getting 27 people with different interests to agree to anything is hard, but the lack of solidarity among EU members can be striking.