The European Commission is "completely lacking" the leadership required to manage its budgets, Financial Secretary Mark Hoban has told MPs.
He was speaking to a government motion on 19 January 2012 condemning European Commission proposals to spend billions on boosting infrastructure.
The Commission says the Connecting Europe Facility (CEF), a programme which aims to improve transport, energy and broadband links across Europe, should receive some extra 24 billion euros of funding.
But the proposals were criticised by Mr Hoban, who said the European Union had to freeze its budget in real terms and individual programmes should not be allowed to breach this rule.
"At home we have taken tough decisions to tackle our deficit. We have demonstrated leadership, exactly the same leadership we now expected from the European Commission in Europe whether that is the annual budget or the financial framework that kind of leadership has been completely lacking," the financial secretary told MPs.
He said the government could not accept the proposals and would argue for "significant reductions" to them.
"It is absolutely vital we work with like-minded allies to restraint the EU budget to ensure we can spend more money at home and ensure less money goes abroad," Mr Hoban said.
But shadow treasury minister Chris Leslie said the government motion ignored the need for growth in Europe and accused ministers of having an "austerity obsession" that was hampering economic prospects.
Mr Leslie moved an amendment which called on the government to come up with a "credible plan for growth", but it was rejected by 99 votes.
MPs went on to approve the government motion criticising the European Commission's proposals to the infrastructure programme.