In a setback to the European Union, the major parties in its parliament have rejected a tentative deal on a seven-year 960 billion euro (£820 billion) budget that is supposed to kick in next year, Belfast Telegraph said.

The move extended the problems for the 27 EU nations that have been trying since last autumn to cobble together a budget for the years 2014-2020 at a time when many are mired in recession as they grapple with their debts. At the same time, a reinvigorated parliament has been clamouring for more clout in the way the EU is run.

The Christian Democrats, Socialists and Liberals all said the conditions laid down in a provisional agreement reached yesterday could not get their full backing. The Parliament's budget rapporteur, Reimer Boege, even resigned from his position, saying the financial elements of the deal on the table were "nothing more than a manipulation".

Socialist leader Hannes Swoboda said his party "will not take a rushed decision".