Britain in talks with other EU states to challenge EU's £1.7bn demand

The UK is in talks with fellow European Union (EU) member states to challenge the EU's latest demand that Britain hand over £1.7bn extra this year to compensate for its recovering economy.

A spokesman at an EU summit in Brussels on Friday told Reuters that Cameron had discussed the increase in payment with Dutch leader Mark Rutte, whose country also faces a new monetary demand.

The spokesman said: "This is money the European Commission (EC) was not expecting and does not need, and we will be working with other countries to do all we can to challenge this."

The EU is in the process of changing how it calculates gross national income, so further changes are to be expected. This extra money should reflect Britain's economic upswing since 1995.

The Financial Times has released preliminary figures to suggest the UK now faces the largest change to how much it will have to pay the EU, compared to other member states.

EC spokesperson Patrizio Fiorilli said that like personal taxation, the more a country earns, the more it should have to pay.

"Britain's contribution reflects and increase in wealth, just as in Britain you pay more to the Inland Revenue if your earnings go up."

Downing Street is said to be troubled by the demand, which will increase Britain's annual contribution by almost a fifth and is due to be paid 1 December.