Political analysts have said that the European Union's double failure over its budget and constitution at a summit this week will probably have to wait until next year for resolution.
The Brussels summit dissolved into recriminations after the member states failed to agree a longterm budget.
The British Prime Minister, Tony Blair, had rejected proposals to freeze the rebate on its contributions to the EU.
President Chirac of France described Britain's stance as pathetic and tragic. While An Taoiseach called the meeting 'hostile and bitter'.
Last night, the ten new member states offered to accept less funding in a last-minute attempt to rescue the talks.
The Prime Minister of Luxembourg, Jean-Claude Juncker, who chaired the two-day summit, said the EU was in a profound crisis.
He said he saw no prospect of a deal in the coming months.
Afterwards, German Chancellor Gerhard Schroeder, blamed what he called the 'inflexible' stance of Britain and the Netherlands for the breakdown of the negotiations.
However, Mr Blair said he hoped the EU could move forward and repeated his call for a root and branch review of how Europe spends it money. He denied that Britain was isolated at the negotiating table.
The British Foreign Secretary, Jack Straw, said he was dismayed but was optimistic that the collapse could be a turning point for the EU.
He said that sometimes to secure a turn in democracies, there had to be a shock.
The failure to find agreement could add financial gridlock to a political crisis unleashed by French and Dutch 'No' votes on the EU's new constitution.
