British Prime Minister David Cameron has warned he would not pay an "unacceptable" €2.1bn bill that the European Union had unexpectedly demanded to be paid by 1 December.
"I am not paying that bill on the first of December," Mr Cameron told reporters at an EU summit in Brussels, thumping the lectern as he spoke.
"If people think that is going to happen they've got another thing coming.
"We are not suddenly going to take out our chequebook and pay that cheque."
The budget bust-up raises fresh questions over Britain's vexed EU membership, which Mr Cameron has vowed to put to a referendum in 2017 if he wins a general election next year.
A clearly furious Mr Cameron insisted repeatedly that Britain, one of the largest contributors to the EU budget, had been treated unacceptably.
He said the €2.1bn demand came virtually out of the blue from the European Commission.
"I first learned about this (on Thursday)," he said, "and I immediately set about finding allies such as Italy and the Netherlands," who also face back-bills.
Making the pill even harder to swallow for Britain, the same budget review gives struggling France a rebate of €1bn, while economic powerhouse Germany gets nearly €800m.
However, according to two well-placed sources, British officials knew that the United Kingdom would have to face a sizeable extra bill towards the EU budget as early as mid September.
The issue was also discussed by officials from all member states, including the UK, on 17 October.
Under EU accounting rules any fluctuations in the economic strengths of a country can have a bearing on how much money it contributes to the annual budget.
RTÉ News has also established that because of the elevated demands regarding contributions to the EU budget from the UK, the Netherlands and Italy, Ireland's adjusted contribution was significantly lowered to just €6.25m.
Last year Ireland's adjusted figures for its relative wealth resulted in an extra contribution of some €100m; officials suggest the figure for 2013 would have been not far off that, if Britain and others had not been required to pay more.
Asked what impact the latest exchanges could have on the 2017 vote, Mr Cameron said: "It hardly helps," while stressing again his belief that Britain had a role to play in a fully reformed EU.
Italian Prime Minister Matteo Renzi last night announced his intention to make public the cost of the European institutions, as a row exploded over his country's budget plans.
European Commission head Jose Manuel Barroso sharply criticised Italy earlier yesterday for publishing a letter from the EU requesting clarifications on its rule-breaking budget.
Mr Renzi responded with his promise to shed light on the EU's own spending.
"We will publish data on everything that is spent by these palaces. We're going to have some fun," he said on the margins of the summit.
He added that he was surprised at Mr Barroso's response to the publication of the EU letter, as the details had already been published by the Financial Times and an Italian daily.
"The Italian budget poses no problems," he insisted.
Hours before the EU summit, the Italian finance ministry released a letter from the EU's Economic Affairs Commissioner Jyrki Katainen, marked "strictly confidential", drawing the fury of Mr Barroso.
The president of the EU's executive said the commission was against this "unilateral" decision by the Italian government, preferring that negotiations on its budget take place behind closed doors.
Mr Barroso, who steps down on 31 October, said the commission was "in consultations" with several countries over infringement of the rules and "it's better this happen in a context of trust".
French President Francois Hollande said his country had also received an EU Commission letter requiring a reply by the end of the week.
The dialogue with EU officials continues "in very good conditions", he said, stressing France's commitment to EU budgetary rules but "with the maximum flexibility".
French officials said that there was no intention to publicise the details of the "a private letter".
