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| EU agrees to budget talks after £1.7bn cash demand on UK | EU agrees to budget talks after £1.7bn cash demand on UK |
| (35 minutes later) | |
| EU finance finance ministers have agreed to David Cameron's call for emergency talks after the UK was told it must pay an extra £1.7bn. | EU finance finance ministers have agreed to David Cameron's call for emergency talks after the UK was told it must pay an extra £1.7bn. |
| Mr Cameron interrupted a meeting of EU leaders in Brussels to express dismay at the demand for the UK to pay more into the EU's coffers on 1 December. | Mr Cameron interrupted a meeting of EU leaders in Brussels to express dismay at the demand for the UK to pay more into the EU's coffers on 1 December. |
| He told Commission boss Jose Manuel Barroso he had no idea of the impact it would have, Downing Street said. | He told Commission boss Jose Manuel Barroso he had no idea of the impact it would have, Downing Street said. |
| It will add about a fifth to the UK's annual net EU contribution of £8.6bn. | It will add about a fifth to the UK's annual net EU contribution of £8.6bn. |
| There has been anger across the political spectrum in the UK at the EU's demand for additional money, which comes just weeks before the vital Rochester and Strood by-election, where UKIP is trying to take the seat from the Conservatives. | There has been anger across the political spectrum in the UK at the EU's demand for additional money, which comes just weeks before the vital Rochester and Strood by-election, where UKIP is trying to take the seat from the Conservatives. |
| Drugs and prostitution | Drugs and prostitution |
| EU leaders discussed the issue for an hour in Brussels on Friday, with Mr Cameron due to give a press conference later. | EU leaders discussed the issue for an hour in Brussels on Friday, with Mr Cameron due to give a press conference later. |
| Mr Cameron told Mr Barroso, who steps down next month, that the problem was not just press or public opinion but was about the amount of money being demanded. | Mr Cameron told Mr Barroso, who steps down next month, that the problem was not just press or public opinion but was about the amount of money being demanded. |
| The surcharge follows an annual review of the economic performance of EU member states since 1995, which showed Britain has done better than previously thought. Elements of the black economy - such as drugs and prostitution - have also been included in the calculations for the first time. | |
| Analysis by BBC Political Correspondent Ross Hawkins | Analysis by BBC Political Correspondent Ross Hawkins |
| The prime minister will do everything he can to show he's coming out fighting over the EU budget demand. | The prime minister will do everything he can to show he's coming out fighting over the EU budget demand. |
| He has buttonholed Commission President Barroso. He has called for an emergency meeting. | He has buttonholed Commission President Barroso. He has called for an emergency meeting. |
| EU leaders have pondered the problem for a full hour in their meeting. | EU leaders have pondered the problem for a full hour in their meeting. |
| The PM is proud of getting down the EU budget limit in 2013. He says it proves he can get his way in Brussels. | The PM is proud of getting down the EU budget limit in 2013. He says it proves he can get his way in Brussels. |
| Handing over £1.7bn to the EU would sting at any time. Doing it a few days after a crunch by-election scrap with UKIP would be agony. | Handing over £1.7bn to the EU would sting at any time. Doing it a few days after a crunch by-election scrap with UKIP would be agony. |
| This could still go David Cameron's way. If he can persuade the EU to tear up the bill, he can come out smiling. | This could still go David Cameron's way. If he can persuade the EU to tear up the bill, he can come out smiling. |
| If he fails it will hurt the Conservatives badly. | If he fails it will hurt the Conservatives badly. |
| Several Conservative MPs have said the UK should refuse to pay the sum, describing it as "illegal". | Several Conservative MPs have said the UK should refuse to pay the sum, describing it as "illegal". |
| EU diplomats told Reuters that finance ministers would meet to discuss the issue, while Downing Street is pressing for "a full political-level discussion" well before 1 December. | EU diplomats told Reuters that finance ministers would meet to discuss the issue, while Downing Street is pressing for "a full political-level discussion" well before 1 December. |
| It is not clear whether there will be a separate meeting or whether the issue will be discussed at a scheduled meeting of EU finance ministers next month. | |
| 'No warning' | 'No warning' |
| Chancellor George Osborne said the Treasury had first learnt about the "totally unacceptable" financial demand last week. | Chancellor George Osborne said the Treasury had first learnt about the "totally unacceptable" financial demand last week. |
| The UK and other member states had been given "no warning" that the sum was due by the end of next month and the UK was now "looking at its options" in consultation with its allies in Europe. | The UK and other member states had been given "no warning" that the sum was due by the end of next month and the UK was now "looking at its options" in consultation with its allies in Europe. |
| "This is not the way an organisation like the European Union should act," he said. | "This is not the way an organisation like the European Union should act," he said. |
| Labour shadow chancellor Ed Balls said it was wrong that an "unfair" bill had been "sprung upon" the UK but suggested that the Treasury should have acted sooner. | |
| "The prime minister says he wants a meeting of finance ministers next month. He should have done this last week," Mr Balls told the BBC News Channel. | "The prime minister says he wants a meeting of finance ministers next month. He should have done this last week," Mr Balls told the BBC News Channel. |
| He added: "I want this bill to come down and a deal should be struck." | He added: "I want this bill to come down and a deal should be struck." |
| The UK Independence Party likened the EU to a "thirsty vampire" and said the demand strengthened its case for exiting the EU. | The UK Independence Party likened the EU to a "thirsty vampire" and said the demand strengthened its case for exiting the EU. |
| Analysis by economics editor Robert Peston | Analysis by economics editor Robert Peston |
| Now to be absolutely clear, none of this is a surprise to the Treasury or chancellor. British officials have known for some time that the inflammatory demand from Brussels was coming. | Now to be absolutely clear, none of this is a surprise to the Treasury or chancellor. British officials have known for some time that the inflammatory demand from Brussels was coming. |
| What did catch them by surprise was what it sees as a deliberate leak by EU officials of the news last night - which they see as an attempt to embarrass David Cameron, as he meets other EU leaders to discuss, among other things, his controversial hopes of being able to restrict migration of EU nationals to Britain. | What did catch them by surprise was what it sees as a deliberate leak by EU officials of the news last night - which they see as an attempt to embarrass David Cameron, as he meets other EU leaders to discuss, among other things, his controversial hopes of being able to restrict migration of EU nationals to Britain. |
| Read more from Robert | Read more from Robert |
| UKIP leader Nigel Farage said the UK already paid £55m a day to be a member of the EU and suggested it would have no option but to pay the supplement. | UKIP leader Nigel Farage said the UK already paid £55m a day to be a member of the EU and suggested it would have no option but to pay the supplement. |
| "To be asked for a whole load more and be given a few days in which to pay it, is pretty outrageous and I think people will be very very angry," he said. | "To be asked for a whole load more and be given a few days in which to pay it, is pretty outrageous and I think people will be very very angry," he said. |
| "And it just leaves Mr Cameron in a hopeless position. Remember one of his big claims is that he cut the EU budget. The result of that cut is that our contribution had gone up a little bit and now it has gone up a lot." | "And it just leaves Mr Cameron in a hopeless position. Remember one of his big claims is that he cut the EU budget. The result of that cut is that our contribution had gone up a little bit and now it has gone up a lot." |
| The additional payment was requested after the European Commission's statistics agency, Eurostat, reviewed the economic performances of member states since 1995, and readjusted the contributions made by each state over the past four years based on their pace of growth. | The additional payment was requested after the European Commission's statistics agency, Eurostat, reviewed the economic performances of member states since 1995, and readjusted the contributions made by each state over the past four years based on their pace of growth. |
| The BBC's head of statistics Anthony Reuben said prostitution, drugs and tobacco smuggling were not included in national income before 2002 when they should have been, under accounting rules. | The BBC's head of statistics Anthony Reuben said prostitution, drugs and tobacco smuggling were not included in national income before 2002 when they should have been, under accounting rules. |
| In contrast, prostitution was included in Germany's own national accounts and given EU budget contributions are based on national income, this partly explains why the UK has been underpaying and Germany overpaying, he added. | In contrast, prostitution was included in Germany's own national accounts and given EU budget contributions are based on national income, this partly explains why the UK has been underpaying and Germany overpaying, he added. |
| The UK has received rebates in the past as a result of this process. | The UK has received rebates in the past as a result of this process. |
| Under the latest calculations, the UK and the Netherlands are among those being asked to pay more on 1 December, while France and Germany are both set to receive rebates. | Under the latest calculations, the UK and the Netherlands are among those being asked to pay more on 1 December, while France and Germany are both set to receive rebates. |