A large majority of EU leaders agreed tonight to extend a deadline to ratify the bloc's embattled constitution beyond the target date of November 2006.

At the start of their summit in Brussels, most of the heads of government said they needed more time to reflect on the No votes in France and Holland. 

But none of them called for the treaty to be abandoned or for any changes to be made to the text.

Britain says budget proposals are unacceptable

Britain has described the latest compromise proposals on the European Union budget as unacceptable and is threatening to use its veto to protect its widely criticised rebate from Brussels.

At the start of a two-day summit, Foreign Secretary Jack Straw said that the proposal by the Luxembourg presidency to freeze Britain's annual refund at its pre-enlargement level until 2013 was not acceptable.

He told reporters the rebate was fully justified and if necessary Britain would use its veto.

The issue of a long-term budget for the European Union has been overshadowed by the continuing row between Britain and France over farm subsidies and London's rebate.