The FINANCIAL -- Prime Minister David Cameron warned European Council president Herman van Rompuy at talks on Thursday that Britain could not support a sharp increase in the EU budget at a time of austerity in the bloc.

After the meeting at Cameron's Downing Street offices, where they were joined by Deputy Prime Minister Nick Clegg, a British spokesman said: "Both the prime minister and deputy prime minister made clear the government's position that we do not support any real-terms increase in the EU budget.

"They reiterated that at a time when EU member states are making tough decisions on spending at home, it is not appropriate for EU spending to increase."

The spokesman said Van Rompuy "recognised the UK position and said that discussions would continue ahead of the summit in November".

As EUbusiness reported, at an EU summit last week, Cameron threatened to veto any long-term spending increase above inflation in the 2014-2020 budget, reportedly to the dismay of some of his counterparts in the 27-nation bloc.

That set the scene for a potentially fractious summit in Brussels next month.

Denmark warned on Thursday that it too would veto the 2014-2020 budget proposal if it fails to receive a one billion kroner (134 million euros, 174 million dollar) discount.

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