Blair, Chirac disagree over EU budget

Speaking after an hour of talks here with Chirac, Blair also said it was time for a "period of reflection" in Europe after the French and Dutch "no" votes on the EU constitution "so that we can give Europe the debate it needs and the direction it needs."

Blair was in Paris on the last leg of a four-nation tour originally focussing on issues such as global warming and African debt relief which will be on the agenda of the Group of Eight summit in Scotland next month.

But the trip was overshadowed by a bitter row over budget contributions to the EU, with Blair strenuously resisting French demands that Britain's five billion euro (six billion dollar) annual rebate from European coffers be submitted for renegotiation.

In a press conference at the British embassy, Blair said that "obviously there is sharp disagreement (and) it is difficult to see these differences being bridged" when the 25 heads of state and government meet on Thursday and Friday.

He repeated the British line that the rebate -- which was won by Margaret Thatcher in 1984 -- can only be renegotiated as part of a broader rethink of European spending policy, including the 40 percent of the budget that currently goes on farm subsides.

Chirac has refused to countenance any change to the Common Agricultural Policy (CAP) of which France is by far the biggest beneficiary, and whose financing is assured up to 2013 under a deal worked out with Germany's help three years ago.