Taoiseach Enda Kenny has said he believes leaders will secure a compromise deal on the controversial €1 trillion budget for the European Union.

He said he had positive talks with European Commission President José Manuel Barroso, European Council President Herman Van Rompuy, and European Parliament President Martin Schulz in Brussels this morning.

The Taoiseach said he thinks there is a "willingness to get a conclusion this weekend" and hopes that can be achieved.

As Ireland currently holds the Presidency of the Council of the EU, Mr Kenny was a key player in today's talks.

Asked if the presidency would be hobbled if a deal was not clinched, Mr Kenny said it would "not make it any easier".

He said it would be "very helpful" if leaders could agree on the overall figure.

French President Francois Hollande said last night that he was keen to secure agreement on the next budget cycle.

A summit of EU leaders last November failed to secure agreement on the controversial plan.

They are due to try to break the deadlock at another summit beginning on Thursday.

Major contributors to the budget, such as Britain, would like to see its overall size being reduced, but this is being strongly resisted by countries such as France.

Complicating matters, countries such as Italy and Denmark are arguing they are paying too much in comparison with other EU states.

The Taoiseach and his Cabinet colleagues will be charged with engaging with the European Parliament over the budget as required under the Lisbon Treaty.

'Critical time' for Ireland's negotiations

Tánaiste Eamon Gilmore is also in Brussels to chair the first General Affairs Council meeting of Ireland's EU presidency.

He has said this is a "critical period of time" for the negotiations on a bank deal for Ireland.

On a possible deal for Ireland on the Anglo Irish promissory note, Mr Gilmore said the Government is seeking to secure the best deal for Ireland and the Irish taxpayer.

Asked whether he had told German Chancellor Angela Merkel last week that the Coalition was in danger if such a deal was not reached, he said the future of the Government is "a matter for the Irish Government and the Irish people".

On the broader negotiations to secure a deal on the EU's long-term budget, the Tánaiste said both he and the Taoiseach had discussions with Mr Van Rompuy on what the proposals would be.

Mr Gilmore said they were working towards having proposals ready for later this week and an agreement being secured.

"Of course it's not easy to reach agreement on something which will require the unanimous agreement of 27 member states, each member state having their own specific interest and their own priority," he added.