David Cameron will not accept "a deal at any price" on future EU spending, Europe minister David Lidington has warned.

Three days before a second EU summit attempts to break the deadlock, Mr Lidington insisted it would be a mistake for fellow EU leaders to believe the Prime Minister was bluffing when he demanded "at worst a freeze, at best a cut" in the euro-budget proposed for 2014-20.

Talks between EU leaders broke down in November with a frustrated Mr Cameron calling on the EU to start living "in the real world" by recognising the need for financial belt-tightening in line with national cutbacks.

He particularly targeted eurocrats' pay and perks, irritating the European Commission by highlighting the number of its civil servants earning more than the British Prime Minister himself and suggesting their numbers should be cut.

Britain is not alone in warning that the public will not understand if the EU budget - funded by taxpayers - grows for the next seven years. The European Commission's opening bid was an overall budget ceiling of one thousand billion euros (£860 billion), but that was pegged back to £756 billion before the last effort at a deal collapsed.

On Monday afternoon, after pre-summit talks between EU ministers in Brussels, EU administration commissioner Maros Sefcovic said a deal at the summit on Thursday and Friday would send a "positive signal" about the European economy and help restore confidence. But he also made clear that any accord had to be "balanced" - in other words giving the commission a big enough kitty to finance the policies the member states have signed up to.

"I urge member states not to get carried away and break the European engine," said the commissioner.

He also replied to Mr Cameron's jibe against the commission's staffing levels, saying: "The commission has already made administration cuts of 8 billion euros (£6.8 billion) in administration cuts, has proposed another billion euros (£860 million) in cuts, and president (Herman) Van Rompuy (who chairs this week's summit) has proposed another 0.5 billion euros (£433 million) of cuts on top of that. Our proposals include cutting 2,500 jobs in the coming five years, which is more than the entire staff of the Court of Justice."

On Thursday Mr Cameron will be seeking much more - including cuts in the controversial Common Agricultural Policy, which absorbs 40% of EU spending - much of it in the form of direct subsidies to farmers. MEPs are due on Wednesday to vote in favour of a new CAP budget which includes increasing some farm subsidies despite the economic crisis.

Mr Lidington said the pre-summit discussions had shown "a willingness to look for a deal", but he warned: "There will not be a deal at any price. Nobody should think that when David Cameron talks about having a real-terms freeze (in EU spending) and about saving the abatement (the UK's rebate on its EU budget contribution) that these are negotiating positions. These are basic positions we will not budge from."

The Press Association, photo by UK in Italy