Pressure is increasing on Tony Blair over Britain's £2 billion EU budget rebate, won by Margaret Thatcher 20 years ago.

Under plans to be debated by the European commission next week, the UK's rebate would be shared out among other rich member states.

The result would be that Britain would become the biggest contributor to the EU's budget, paying 0.51 per cent of its gross domestic product, compared with 0.35 per cent for Italy and 0.33 per cent for France, countries of a similar size and wealth.

A British government spokesman insisted: "The rebate is fully justified and is not on the table. The reason the rebate exists is because of the massive distortion of EU spending, especially on farm subsidies, which hugely benefit France as well as other countries but give little to the UK."

Meanwhile, Gordon Brown has been given two months to drop "severe and intrusive" sanctions against cross-Channel shoppers who fall foul of government limits on cheap alcohol and cigarettes.