Tony Blair has rejected France's call for the UK to give up its £3bn a year European Union rebate as a "gesture of solidarity".
The UK's rebate continues to be a controversial EU issue
Mr Blair said even with the rebate the UK still paid 2.5 times more than France or Italy - a gesture in itself.
He was speaking at 10 Downing Street following talks with the Danish premier Anders Fogh Rasmussen.
Downing Street said Mr Blair did not want to get into a "macho stand-off" with his fellow European leaders.
Mr Blair said: "Britain has been making a gesture because over the past 10 years, even with the British rebate, we have been making a contribution into Europe two-and-a-half times that of France.
"Without the rebate, it would have been 15 times as much as France. That is our gesture."
Time have changed?
He said the very reason the rebate existed was because otherwise the British would be contributing an "unfair proportion" to EU coffers.
"The reason for the unfairness is because the spending of Europe is so geared to the Common Agricultural Policy," he added.
Mr Blair called for a debate on the way Europe spent its budget, saying the continent is different to the way it was 30 years ago.
Margaret Thatcher won the rebate in 1984, saying she wanted the UK's money back.
Number 10 said it was here to stay and released figures that show the UK was the second largest net contributor to the EU after Germany from 1995 to 2003.
'Jelly to a wall'
Conservative shadow chancellor George Osborne has said it is not good enough for Mr Blair to say he would not negotiate away the rebate.
"What he needs to say is that he will not diminish its value in any way and that there will be no concessions and no fudging," he argued.
"Trying to extract the truth from this prime minister is like trying to nail jelly to a wall. He must be completely clear about what he means."
Do you think the UK should give up the EU rebate? Or was Tony Blair right to refuse? Is the system fair? Send us your views using the form below.
The PM was absolutely right. In fact, the rebate should increase year on year to keep pace with inflation, and Britain should consider refusing to make any further contributions until the auditors confirm that the EEC budget has been properly accounted for.
Bill McBratney, Edinburgh, Scotland
If someone would explain how and why we pay what we do and how much perhaps the answer would be obvious?
Tony Morris, Kidderminster England
Contributions should be proportional to the GDP of the country. This is an equal measureand then there would be no need for a rebate
Matt, Cornwall, England
Blair is quite right to defend the rebate because he has a duty to the national interest. The rebate is fair because it prevents the UK from simultaneously being the biggest contributor and the smallest beneficiary. Blair should increase its value, however, by using it as a tool for negotiation for the betterment of the EU (for example, reduce it for the passage of the services directive- or even better, remove it for the elimination of the CAP, which is pointless and benefits no-one in the long term).
Samuel Coldicutt, Auckland, New Zealand
Why should Britain subsidize counties in Europe that cannot effect structural reform and start making their own money? Is it that we want to pay for French farmers to carry on living uneconomically?
Paul Brennan, Pasadena, California
I think its time that the great European, M. Chirac, made a "gesture of solidarity" and agreed to reform of the Common Agricultural Policy!
David, Hertfordshire, UK
Mr Blair should use this opportunity to bring down the common agricultural policy that represents the interests of a small majority at the expense of the majority. Britain could give up the rebate if others agreed to the abolition of the CAP. If they want to keep on subsidising domestic farmers leave it to the individual countries. Allow third world imports to compete, this helping to reduce world poverty and also possibly reduce the undemocratic EU's budget.
Scrap the rebate but scrap CAP at the same time.
Paul, Reading, UK
France and Germany want to impose their decisions on all the other EU states and have the British pay for the whole thing. Perhaps Brussels should try imagining what their budget would look like if the British were not in the EU.
John Hopkins, Virginia Water, UK.
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