BRITAIN takes over the European Union presidency today, with France refusing to budge on farm subsidies and Jack Straw playing down hopes of reaching agreement on the budget.

Dominique de Villepin, the French Prime Minister, set the tone yesterday for what promises to be an acrimonious six months by flatly rejecting Britain’s demands to review the Common Agricultural Policy. Speaking in English “because I want to be sure to be perfectly understood by my British friends”, he said at a Paris press conference: “We are ready to discuss everything but not to negotiate on this issue in this period.”

In the Commons, the Foreign Secretary, setting out Britain’s priorities, played down hopes of a budget breakthrough. Mr Straw said only that Britain hoped to “make progress” on the issue in the next six months. He told MPs: “Any new financial perspective must, at the very least, set out a process which leads to a more rational budget”. The Government recognised its responsibilities in holding the presidency, he said, “and we will work hard to reach agreement on future financing by the end of the year”.

Privately, British officials are concerned that progress will be painfully slow before the likely departure of Jacques Chirac in France’s presidential election in 2007. The 2007-2013 budget has to be agreed by 2006.

Mr Straw said that Britain would discuss demands that it surrender its £3 billion-a-year budget rebate only were the entire EU budget, including farm subsidies, overhauled. “The rebate is an anomaly, but it is an anomaly on an anomaly,” he said. “What we have to do is address that, so that the case for the rebate withers away.”

He also underlined Britain’s determination to press on with EU enlargement despite growing opposition to Turkish membership in France and other member-states.

Mr Straw said that Britain’s other presidential priorities would be economic reform, cutting red tape and opening up the European market to skilled and semi-skilled workers. Tony Blair will expand on Britain’s plans when he holds talks with the European Commissioners in London today. He will tell them that they are a crucial part of the reform process. A No 10 source said: “They are reform-minded and so crucial to this part of the agenda.”

One reform that the Government wants to introduce, and which was contained in the moribund EU constitution, is to allow television cameras into the Council of Ministers, the EU’s supreme legislative body.

Downing Street says that this would rid Brussels of its culture of secrecy and restore public confidence in the EU. Critics say that it would make little practical difference, and simply set a precedent for bringing parts of the constitution in “through the back door” despite the document’s rejection by the French and Dutch.

The Council of Ministers is one of the most powerful law-making bodies in the world, and one of the most secret outside Cuba and North Korea. Comprising one government minister from each of the 25 member-states, it has the ultimate say on all EU legislation, which accounts for about 60 per cent of laws in Britain. It meets behind closed doors. How ministers debate or vote is revealed only through self-serving leaks.

A government spokeswoman said: “We are committed to looking at ways of making the EU more transparent. We need to discuss this with our partners.”

Chris Davies, leader of the Liberal Democrats in the European Parliament, who has been campaigning on the issue, said: “Is it any wonder that people complain of a democratic deficit in Europe when debate about new laws in the Council of Ministers takes place behind closed doors?”

Neil O’Brien, campaign director of Britain’s anti-constitution “no” campaign, said: “They are trying to establish the principle of introducing parts of the constitution through the back door with an uncontentious issue, before moving to other more contentious issues.”

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