The latest round tough talks on the European Union budget after a two week break has collapsed after austerity-minded states refused to plug a 2012 budget shortfall in funds destined for Europe's needy.
Friday's talks had been scheduled to approve a budget for 2013 but instead snagged on an 8.9 billion euros ($A10.98 billion) hole in this year's spending, according to figures provided by the European Commission.
Approval for the massive EU budget must be agreed between the 27 member states and the European Parliament, but MEP Alain Lamassoure, who heads the assembly's budget committee, said: "The council (of ministers) were unable to negotiate so the negotiations were suspended.
The collapse of the 2013 budget talks, which leaders will have a last-chance opportunity to resume on Tuesday, augurs badly for a November 22-23 summit called to settle the bloc's even more hotly disputed 2014-2020 spending plans.
"If we succeed in these negotiations now, we'll create a better atmosphere for convergence and agreement in the (summit) negotiations," Cyprus's deputy EU minister Andreas Mavroyannis, who chaired Friday's session, had said.
But even before considering spending for 2013, governments refused to contribute funds to make up this year's shortfall, threatening the future of a wide range of social programs including 670 million euros ($A826.96 million) set aside to compensate Italian earthquake victims.
Officials said EU governments had pledged to ensure Italy would receive the funds.
Mavroyannis said conciliation efforts would continue until a Tuesday deadline.
For 2013, the European Commission and European Parliament are seeking a 6.8-per cent increase -- or nine billion euros -- to 138 billion euros to bolster growth and jobs in the slowing economy.
But net contributors, led by Britain, are seeking a sharp reduction to match the spending cuts and austerity policies of most European capitals.
France, Finland and Germany want the 2013 budget to be cut by 5.0 billion euros ($A6.17 billion), while London has suggested even more, stressing the need for austerity.