The issue has exposed splits between EU members

The European Commission wants a major boost in spending as the EU expands from 15 to 25 members in May.

But at least six states, including the EU's biggest contributors, want the budget capped at its current rate.

The issue is exposing splits between the net givers - who fear expansion could cost them billions - and the net receivers, keen to maintain their aid.

You can't say on one hand 'You in Germany have to save money and cut down expenditure', and demand at the same time 'You have to pay more money to Brussels' Hans Eichel German Finance Minister Why EU members disagree

The current budget of around 100 billion euros (�70 billion) a year amounts to 0.98% of the EU's GDP.

Brussels wants to put the figure up to 1.22% of Gross National Income (GNI) in the years after 2007.

That would still come in under the permitted upper limit of 1.24%.

But the six countries - Britain, France, Germany, the Netherlands, Austria and Sweden - want the limit lowered to 1% of GNI.

EU PROPOSED SPENDING The EU budget for 2004 is 1.03% of the gross national income of the 15 current member states

The commission said its proposals for an expanded budget would focus on three main areas - sustainable development, the interests of the citizens and strengthening the union's voice as a global partner.

Planned spending would rise to 125bn euros in 2007 and 143bn in 2013.

Germany - under commission scrutiny over the state of its national economy - earlier dismissed the commission's proposals as unrealistic.

"It doesn't fit. You can't say on one hand, 'You in Germany have to save money and cut down expenditure', and demand at the same time 'You have to pay more money to Brussels'," Finance Minister Hans Eichel said on Monday.

"You cannot preach water and drink wine."

UK Chancellor Gordon Brown has also urged restraint in the EU budget, warning the commission's budget proposals would end up costing member states an extra 29 billion euros (�20 billion) a year.

He said the EU budget should be "limited and refocused to support the union's priorities".

Prodi says no miracles without money

The commission has stood by the need for extra cash.

Commission President Romano Prodi said he could not work "miracles" on limited funds as the expansion goes ahead.

And European Parliament chief Pat Cox said EU countries had to put their money where their mouth is.

"This is not the time to do Europe on the cheap, nor is it the time for short termism, retreat or hesitation," he said.

A final decision on the budget is not expected until a European summit in March.

ADOPTION TIMELINE February: Commission unveils proposals June: European Council responds Commission makes formal proposal before summer break New European parliament (elected June) holds debate Early 2005: Final assent of European Council

The stand of the six nations has political as well as financial implications.

Their letter calling for the 1% budget cap was written only days after the collapse of talks on the EU constitution in December.

It was seen in some quarters as a thinly-disguised revenge attack on Poland and Spain - big EU beneficiaries - for their refusal to relinquish powerful voting rights during the constitution battle.