'UK winning constitution talks'

Tony Blair faces hours of talks over the constitution

Final talks on the EU constitution will be tough but Britain is winning growing support for its position, Chancellor Gordon Brown has said.

Speaking during talks with fellow European finance ministers in Brussels, Mr Brown said Britain would keep to its "red lines" on retaining key vetoes.

That stance would also ensure Europe became more competitive, he said.

The chancellor also claimed more countries were backing his efforts to curb the European Commission's budget.

Shared interests

The Irish Government, which currently holds the EU presidency, is expected to produce a new draft constitution text shortly.

The move follows Tony Blair's dramatic U-turn in deciding to hold a referendum once EU leaders reach a deal on the constitution.

I do not believe the commission's proposals for a vastly increased budget are going to be acceptable to member states as a whole Gordon Brown Chancellor

Asked if the referendum decision had strengthened the UK Government's hand in the constitution talks, Mr Brown said it was British arguments that were paying off.

He told BBC News: "In the final negotiations I believe there is now more support for our position than there was a few days, a few weeks ago.

"But of course, we have got to get the right deal for Britain. That will also in my view be the right deal for the European Union."

'Red lines'

Mr Brown insisted Britain could not accept tax harmonisation, a federal European fiscal policy or losing its vetoes on issues like defence, foreign policy or social security.

The constitution had to reflect such concerns to ensure Europe was flexible, competitive and open, he argued.

And he said the government could win a referendum "yes" vote if it secured a treaty which was "acceptable for Britain".

The Conservatives are among those saying the constitution is a step towards a European "super state".

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

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

Battle lines

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

Britain is among those who want the budget capped. Mr Brown said there was progress on resistance to the proposals, which he said would raise the EC budget by 30%.

"What is interesting is that we are gaining support for our position. A number of countries have today indicated that they would be prepared to support our tough approach to budget discipline.

"I do not believe the commission's proposals for a vastly increased budget are going to be acceptable to member states as a whole."

Mr Brown said increasing numbers of countries were also backing his calls for economic reforms which would make the EU more competitive, more flexible and have a better trading relationship with America.