A summit to agree a long-term budget for Europe ended without a deal on Friday after failure to bridge deep divisions over spending priorities for the next seven years.

Despite pressure from some countries to keep talking, summit chairman Herman Van Rompuy pulled the plug under pressure from German chancellor Angela Merkel, who insisted the differences between EU leaders were too great.

During a second day of talks, which lasted about four hours, Prime Minister David Cameron hotly argued for more spending cuts after what he called Thursday's "tinkering" which did not go far enough.

There was plenty of support for trimming the budget from a proposed 940 billion euro (£759 billion) but no agreement on where the axe should fall.

Mr Cameron had threatened a veto if he did not get the deal he wanted but he was persuaded to keep his powder dry and come back another day for a second attempt.

That is likely to be in January or February, with Mrs Merkel insisting there is no crisis and there is plenty of time to resolve one of the most complex internal negotiations the EU faces every seven years.