David Cameron has told the European commission it should stop "picking the pockets" of European citizens as it seeks to push through an above-inflation increase in the EU budget.

As he prepares for a crucial European summit in Brussels on Thursday and Friday, the prime minister said pressing for budgetary restraint in such a difficult economic climate made him a good European.

But Cameron was given a taste of the divisions within the Conservative party when the pro-European Kenneth Clarke confirmed he had sought an assurance from the prime minister that he did not intend to leave the EU.