Blair in spirited defence of UK role in Europe

EU: Tony Blair denounced "reactionary" British Euro-sceptics for living in the era of Winston Churchill yesterday as he mounted…

EU: Tony Blair denounced "reactionary" British Euro-sceptics for living in the era of Winston Churchill yesterday as he mounted a passionate defence of the UK's membership of the EU.

Enraged by a United Kingdom Independence party MEP, who attacked him for building "new sewers in Budapest", the prime minister let rip during a speech to the European Parliament.

"You sit there with our country's flag, but you do not represent our country's interests," he told Ukip's Nigel Farage, who had criticised a £183 billion EU package for eastern Europe. "This is the year 2005, not 1945. We are not fighting each other any more."

To loud cheers, Mr Blair pointed to MEPs from 25 countries who had crowded into a large committee room to hear his last address as EU president.

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"These are our partners, our colleagues, and our future lies in Europe. And when you and your colleagues say, 'What do we get for what we contribute to enlargement?', we get a Europe that is unified after years of dictatorships in the east, and we get economic development, and we get a budget which puts for once and for all an end to the need for the rebate. That's what we get, if we have the vision to seize it."

Mr Blair's assault came as he defended the €862 billion EU budget brokered by Britain at last week's summit in Brussels, which sees Britain give up £7 billion of its rebate during the 2007-2013 period.

No cuts will be made to the rebate until 2009, the likely year of the next general election, handing the chancellor a windfall over the next four years.

One British official said: "There is no way the Treasury can be upset with the budget. They were involved at every stage and promoted the stepped phasing out of the rebate."

The review's main aim will be to curb lavish French farm subsidies, but France could veto any changes, which could not come into force in any case until 2014 at the earliest.

Mr Farage said the prime minister had been "outclassed" by French president Jacques Chirac at the talks because, "unlike you, Chirac stood up for the French national interest".

The Ukip leader in the European Parliament added: "The reality is that Britain is isolated, alienated and completely alone in Europe." A few MEPs called out that it was Mr Farage who was alone.

Mr Blair insisted that the budget outcome was not ideal, but said: "Imagine if I had come here to say that we had got no budget deal at all.

"In June I said we needed a financing deal allowing Europe to move forward but which set a long-term reform and restructuring perspective.

"I think the budget agreement we reached, with a commission-led review in 2008, gives the opportunity to debate from top to bottom the EU budget, what we spend, what we spend it on, and how contributions are made - both the Common Agricultural Policy and the rebate."

The prime minister acknowledged that any changes arising from a review required the unanimous approval of all member states, but added: "There is a tremendous willingness across the member states to contemplate a more ambitious budget if it is in the context of a reformed budget."

But the first problem is to get the current deal endorsed by MEPs, many of whom want more money put in the kitty.

Negotiations start today between the European Commission, MEPs and EU government ambassadors in an attempt to deliver the European Parliament's required support by March at the latest.