Blair alters tactics to save rebate

TONY BLAIR is preparing to raise the stakes over the British budget rebate by claiming that countries including France, Italy and Denmark get a better deal than the UK from Brussels and should pay a bigger share of its costs.

The decision to switch tactics comes on the eve of today's one-day summit of leaders in Petersberg near Bonn, called to break the deadlock over financing of the EU, which needs to be reformed before enlargement to the east.

The prime minister, who arrived in Germany last night, is prepared to take a tough line if other member states press him over reform or abolition of the rebate, worth around pounds 2bn a year. A British official said: "Mr Blair will point out that many countries, such as France, Italy and Denmark, either pay less or receive more back despite being richer than the UK."

The rebate is one of a series of sensitive issues due to be discussed, including reform of the common agricultural policy, where France and Germany are at odds, the freezing of the EU budget and consequent curbs on spending in poorer regions.

Yesterday there were few signs of a breakthrough in agriculture as farm ministers spent their fourth consecutive day of talks discussing a new compromise document prepared by Germany, which holds the EU presidency.

In Bonn officials have played down the prospects of significant agreement at today's meeting, aware that on many issues the players will repeat well-known negotiating positions, reserving final negotiations for a second summit in a month's time in Berlin.

Gerhard Schroder, the German Chancellor, has appealed in a pre-summit letter to fellow leaders to keep the expected blood-letting private from the media.