Europe row boils over

Tony Blair and Gordon Brown unleashed a ferocious two-pronged attack on Jacques Chirac today.

The row over Europe boiled over into the most bitter diplomatic bust-up for years.

The Prime Minister and Chancellor accused the French president of living in the past and of trying to "wish away" Europe's real problems.

They accused him of deep unfairness in his demands for an end to the £3billion British rebate. This was negotiated by Margaret Thatcher to make up the shortfall between what the UK pays into the EU and what it gets back.

Mr Blair said he would only agree to renegotiate the rebate if France backed down on its refusal to reform its handouts from the costly Common Agricultural Policy (CAP). Mr Brown said the amount Britain gets is dwarfed by the amount French farmers receive.

Mr Blair said: "The rebate is there for a reason. It is to correct what would otherwise be a quite unfair distribution of European money."

He said 40 per cent of the European budget goes on agriculture which covers just five per cent of the population and generates less than two per cent of the output.

Mr Blair added: "And you cannot have a situation in which Britain, which is already paying even now with the rebate far more in net contributions, is subject to further unfairness." In remarks clearly aimed at Mr Chirac, he called for wider reform, saying "We need to live in today's world."

He said: "In order to get a proper deal on financing you have got to look at all the aspects of the European budget. You cannot simply rule things out and say they are excluded from consideration."

President Chirac hit back in Paris. Flanked by German leader Gerhard Schrˆder, he tried to isolate the British premier, saying: "We all have to make an effort, and our UK friends in particular need to realise things are changing."

The row flared after President Chirac launched a campaign against Britain's rebate in the wake of his humiliating defeat in the referendum on the EU constitution.

Mr Blair finally countered with some of the most aggressive shots fired across the channel since Lady Thatcher negotiated the rebate 21 years ago.

The Chancellor went even further in a BBC interview. In deliberately provocative comments, he laid into Mr Chirac's demands for an end to the rebate.

Mr Brown poured scorn on the French president for complaining about the UK rebate when in 2013 France expects to get nine billion euros simply for its agriculture policy.

He attacked France for taking up such a huge share of the EU budget, adding: "There are bigger issues to discuss before we can reach a settlement than simply discussing the British rebate."