MEPs have rejected the deal done by European Union heads of state on the long-term EU budget.
Europe's governments want to approve payments of €908bn, representing 0.94% of EU wealth, which critics say is the same level of spending as the late 1980s.
It was rejected by 506 MEPs, with 161 in favour.
The European Parliament has to sign off on any deal on the long-term budget, known as the Multiannual Financial Framework, so negotiations will now begin to try to find a compromise.
Minister for European Affairs Lucinda Creighton said she hoped to see an agreement by May.
She said she appreciated that the European Parliament wanted to improve the proposal by EU governments, adding that the Irish Presidency would ensure that progress is made.
Ireland set to lose MEP under new proposals
Separately, MEPs have adopted proposals that would see Ireland lose a seat in the European Parliament following the 2014 elections.
There are currently 754 MEPs, but the Lisbon Treaty only allows for 751 seats from 2014 on.
Croatia, which joins the EU in July, would also be entitled to 12 seats.
Under the proposals, Ireland would go from 12 seats to 11.
Eleven other countries are to lose a seat each, with Germany dropping three.
Dublin Labour MEP Emer Costello criticised the proposals, claiming that small and medium sized countries would suffer at the expense of larger ones.
She also said the measures had considerable implications for Ireland's representation across the 22 European Parliament Committees.
Fine Gael MEP Gay Mitchell said the move could be challenged in the courts.