Brussels: European Union leaders approved a political deal on the bloc's hotly contested 2014-2020 trillion-euro budget despite British fears of a cut in its cherished rebate. Asked whether heads of state and government had approved a deal clinched earlier in the day, Herman Van Rompuy, who heads the EU Council, said, "It's a quite clear yes."

Van Rompuy admitted at a news conference however that "we discovered certain budgetary problems for certain countries" that would be corrected by "technical not political measures."

Hours before the bloc's 27 leaders gathered for a two-day jobs crisis summit, a deal on the USD 1.25 trillion budget was reached between the European Commission, which is the EU executive, the European Parliament leadership and Ireland which currently holds the rotating EU presidency.

The high-level compromise follows months of bitter dispute between European Union institutions and European capitals over the budget, but must still be formally approved by parliament's 754 lawmakers.

But the euphoria quickly ebbed when Britain's Prime Minister David Cameron stepped into the summit pledging to do battle to protect the 3.1 billion sterling annual UK rebate won in 1984 by Margaret Thatcher.

"It's absolutely essential that we stick to the deal that we reached in February and that we protect the UK rebate," he said, referring to a February proposal on the bloc's seven-year budget.

Diplomats said Cameron's discussion on the issue with Van Rompuy delayed the opening of the summit talks and European Parliament president Martin Schulz worried that the British premier's stand could derail the morning compromise.

"I think Prime Minister Cameron is never happy when we discuss the European budget," Schulz said. EU diplomats played down the row however, and a British government source said, "We arrived at the Council concerned that some were seeking to change the rebate contrary to the deal done back in February.

"We got the assurances that we needed, set out in full and fought off attempts to water it down. The British rebate is secured," the source added. Britain feared a cut in the debate due to a reform in the EU's Common Agricultural Policy linked to spending on rural development in new EU member states. But others, notably France and Italy, fear they might have to pay more if Britain gains satisfaction.


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