The deadlock over the EU's nearly €1 trillion budget has been broken after talks in Brussels attended by Taoiseach Enda Kenny and Tánaiste Eamon Gilmore.

MEPs had demanded that certain pre-conditions - known as the Multi-annual Financial Framework (MFF) - were met before they would negotiate on the budget.

The talks process is being led by Ireland under its six-month Presidency of the European Council.

This evening the European Parliament agreed to start discussions on finalising the seven-year budget plan next Monday.

Mr Gilmore said he is “very pleased” that it was possible to break the deadlock.

Speaking in Brussels, Mr Gilmore said there had been a “very successful meeting” between Commission President Jose Manuel Barroso, Parliament President Martin Schulz and President of the European Council Enda Kenny.

He said the outcome was that they had “agreed to unlock” the negotiations on finalising the budget which will run from 2014 to 2020.

Mr Gilmore said he is hopeful that the procedure could be concluded by June.

Mr Gilmore, who is lead negotiator on the budget for EU Member States, had warned that failure to kick-start negotiations very quickly would have put in jeopardy €325bn of cohesion funds which EU citizens are depending on to create jobs at a time of economic crisis.

Speaking after the talks, the President of the European Parliament Martin Schulz said he was happy with the progress and that there was a better understanding that the two budget discussions were linked.

He praised the Irish Presidency negotiation team, saying Mr Kienny and Mr Gilmore were “pro-Europeans... convinced fighters for an agreement on a European level”.

However he said some Member States were trying to row back on the February agreement.

Mr Schulz signalled that MEPs would demand more spending on Cohesion Funds in the upcoming talks.

Last February, EU leaders agreed on a budget of €960bn to be spent between 2014 and 2020 - a reduction of more than €30bn on the previous plan.

The European Parliament must give its consent before such a budget can become law. However when MEPs considered the matter in March, they rejected the document.

At the core of the dispute is a demand by the European Parliament for any negotiations on the next MFF to be linked to the EU's 2013 budget which, according to the European Commission, is under-funded by more than €11bn.

MEPs have said they want to know how that short-fall in the 2013 budget is going to be filled by Member States, before they will enter into talks on the 2014 to 2020 plan.

Mr Gilmore had argues that the two budgets are separate negotiating processes.

On the MFF, MEPs have also indicated they want a number of changes including greater flexibility provisions so that money can be moved from one year to another, a mid-term review so that allocations can be re-examined if and when growth returns to the EU economy, and new ways for the EU to be able to raise money itself, rather than having to rely on commitments from Member States.

Mr Gilmore says he has been given a mandate to negotiate on MEP concerns and believes there is a good basis for reaching a compromise.

The revised MFF will now go to a plenary vote of the European Parliament where an absolute majority of all MEPs would be required for this budget to pass.

Once Parliament's consent is given, negotiations could then get underway on 67 different headings - providing the legal basis for the budget to become law before the end of the year.