Media playback is unsupported on your device Media caption David Cameron: "People in Europe know I mean what I say. They know I'm capable of saying no"

Prime Minister David Cameron has said he would veto a new European Union budget "if necessary".

The EU is beginning negotiations on its next budget for 2014 to 2020.

Mr Cameron also told the BBC that in the longer term the EU should have two different budgets - one for countries in the eurozone and one for those outside the single currency.

Last year Mr Cameron vetoed an EU-wide treaty to co-ordinate budget policies and impose penalties on rule-breakers.

Speaking on the Andrew Marr show, on the first day of the Conservative Party conference, Mr Cameron said experience showed that "people in Europe know I mean what I say".

"I sat round that table - 27 countries, 26 of them signing up to a treaty and I said, 'This is not in Britain's interests, I don't care how much pressure you put on, I'm not signing, we're not having it.'

"They know I'm capable of saying no and if I don't get a good deal I'll say no again."

He said he would block talks if "massive increases" in the budget were proposed or if a deal that "does not have proper control" was put forward.

Two budgets

The prime minister said the EU budget was a "classic example of where we should probably start to draw new lines".

"There will come a time I believe where you're going to need to have two European budgets - one for the single currency, because they're going to have to support each other much more, and perhaps a wider budget for everybody else."

He added that he did not think this would be achieved this time but it was an indicator of the way Europe is going.

Mr Cameron also said he favoured a referendum on a renegotiated role for Britain in the EU but once again ruled out holding a simple Yes or No vote on Britain's membership.

"The fact is, I think most people in our country don't actually want to leave the European Union or just accept how it is at the moment. They want to change it."