Key European leaders have shot down the UK's last ditch proposals to break the EU budget deadlock ahead of a summit in Brussels starting on Thursday.
EU leaders will try to agree on a new budget at a summit this week
Within hours of the proposals being unveiled by the UK government, France, Germany and Poland had rejected it.
European Commission President Jose Manuel Barroso added that the offer was "wholly inadequate" and "not enough".
The offer included an increase in the budget, more money to new member states but no new cuts to the UK's own rebate.
French Foreign Minister Philippe Douste-Blazy said the offer "provides no basis for an agreement acceptable to all".
Poland, which would get an extra 1.2bn euros (£814m), said it would veto the proposal as it stood.
KEY ELEMENTS OF PROPOSAL
Spending up by 2.5bn euros to 849.3bn over seven years
More funds for Central Europe and the Baltics
Sweeteners for most states, but not France, Germany or Italy
No new cuts to UK rebate
No compromise on UK demand for mid-term budget review
Spain demanded that Britain go further on its rebate and the Italian government called the offer "unsatisfying".
Government sources in Germany described the proposal as "untenable".
The new UK proposal would increase the 2007-13 budget by a total of 2.5bn euros (£1.7bn) compared with its first proposal, issued a week ago.
It leaves untouched the earlier proposal to cut the rebate by 8bn euro (£5bn) over seven years, increasing the UK's net contribution to the budget.
The new proposal includes sweeteners for a number of countries, including the countries of Central Europe and the Baltic, Austria, Finland, Greece, Ireland, the Netherlands, Portugal, Spain and Sweden.
There is nothing for France, Germany or Italy.
Britain's first budget offer was widely criticised for making the 10 new countries which joined the EU in 2004 take the brunt of the pain - a 10% cut in development aid, compared with a budget proposal put forward by Luxembourg earlier this year.
The new UK proposal offers Slovakia and Lithuania extra money for decommissioning nuclear power plants, and additional development funds for Poland, Hungary, the Czech Republic, Estonia and Latvia.
The UK's new proposal, like last week's, sets the overall budget at about 1.03% of the EU's gross national income, well below the 1.24% sought by the European Commission.
"It is not credible, let's be honest, to speak about further enlargement of the EU if we are not able at 25 to decide about the future financing of the Union," Mr Barroso said on Wednesday.
He said it would be impossible to accommodate Bulgaria and Romania, which are due to join the EU in 2007 or 2008, under the British proposal.
UK Foreign Secretary Jack Straw said that the UK rebate would rise from its average level in recent years of about 5bn euros (£3.4bn) to about 7bn euros, despite the proposed cut of more than 1bn euros per year.
Correspondents say that the UK's refusal to cut the rebate further in its new proposal does not mean the issue will be off the table when EU leaders tackle the budget at a summit on Thursday and Friday.
Many EU countries have asked for further cuts since the UK's first proposal was published on 5 December, with France's Mr Douste-Blazy demanding a cut of 14bn euros overall.
But Mr Blair says he will offer no further concessions unless France agrees to at least allow the possibility of serious reform of agricultural policy in three years time.
BBC Europe Editor Mark Mardell says that the UK proposal can be seen as an attempt to isolate France, and that a repeat of the Anglo-French clash at the June summit in Brussels is possible.