The prime minister has said a deal on the EU's long-term budget is "still doable" and it is in Britain's interests to try to reach an agreement.
He made a statement to the Commons on 26 November 2012, following the breakup of the recent summit of EU leaders without agreement on the so-called Multi-Annual Financial Framework (MFF).
The "deal on the table was not good enough", he told Parliament.
Labour said the UK had failed to build alliances needed to obtain a deal, but Mr Cameron said that the UK's call for cuts had been backed by Germany, Sweden and the Netherlands, among others.
Labour leader Ed Miliband said the Conservatives were divided over Europe and the prime minister was "being dragged to the exit door" by backbenchers and certain cabinet ministers who were "undermining his authority" by urging an "in-out referendum" on the UK's future in Europe.
"The prime minister has said repeatedly he is in favour of Britain remaining a member of the EU, but why is he allowing his colleagues to take the opposite position?"
The MFF - set by the Commission at 1.025 trillion - sets out the budgetary ceilings for the seven year period from 2014-2020, a 4.8% increase on the current MFF.
The Commission's stance has been backed by European Parliament, but the Council of Ministers, which represents member states, is split.
European Council President Herman van Rompuy proposed a lower MFF of 973bn, but this was still deemed to be too high by countries including the UK.
The MFF is equivalent to about 1% of total output (GDP) across the EU countries, and the combined national budgets are far greater.