BRITAIN is to propose a £1 billion-a-year cut in European Union farm spending in an attempt to push down national contributions to the Brussels budget.

Although the figures have not yet been agreed, the move is expected tomorrow when Britain, as current holder of the EU’s rolling presidency, will unveil detailed plans for a compromise on the next Union budget from 2007-13.

The proposal comes amid warnings that Tony Blair might not be able to strike a deal on the budget, despite offering to give up part of Britain’s annual £3.8 billion budget rebate from the EU.

Douglas Alexander, the Europe minister and an ally of Gordon Brown, the chancellor, sounded a cautionary note yesterday. “I think probably by the end of next week we will have a clearer idea of whether a deal can actually be done,” he said.

Britain wants to reduce the EU’s overall seven-year budget to £579 billion to keep contributions from the 25 member states down to 1.03% of gross national income.

Tomorrow’s document is expected to propose shaving about £1 billion each year from the estimated £30 billion budget of the common agricultural policy up to 2013. Targeting farming rather than overall subsidies to poorer regions of the EU will be seen as a bid to ward off criticism that Blair is taking money mainly from east European members. Instead, richer recipients of farm subsidies such as France would lose cash.

Liam Fox, shadow foreign secretary, said: “Labour’s whole European policy is an incoherent shambles. If a deal is not reached on the budget, it will be a pitiful moment for the British presidency.”

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