EU budget commissioner Gunther Oettinger confirmed the UK would lose its rebate at a press conference in Brussels (European Commission)

The EU’s budget chief has ruled out the prospect of the UK keeping “the mother of all rebates” if Brexit is abandoned.

Gunther Oettinger said on Friday that he would find it “absolutely fabulous” if British voters decided to remain in the EU through a second referendum.

But he dealt a blow to campaigners calling for a ‘people’s vote’ by confirming the UK would have to pay more into the EU budget if it remained.

Speaking to reporters in Brussels, he said: “Even if, in the improbable but pleasant case that the UK were to remain – I would certainly find that to be absolutely fabulous but I can’t imagine it – in that instance then the gradual exit from the rebate would still be kept.

“I think that’s something which is no longer appropriate.”

His comments are likely to be seized on by Brexit supporters as proof the UK is better off outside the EU.

The rebate, negotiated by Margaret Thatcher in 1984, sees a 66% reduction applied to the UK’s net contribution to the EU budget.

In 2016, that meant the UK paid £13bn into the budget after receiving a £4bn rebate.

That precedent led to other countries to call for the same treatment and Austria, Denmark, Germany, the Netherlands and Sweden all subsequently won their own rebates.

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Oettinger wants to get rid of all rebates after Brexit as part of his plan to plug the budget blackhole created by the UK’s departure.

Speaking in January, he said: “Our British partners will be leaving us. That will then ensure that the mother of all rebates will be eliminated.

“This should be a good way of ensuring that we will no longer have any other rebates in place.”

The German politician also confirmed on Friday that the UK would have to continue paying to be part of the EU’s customs union if it remained as part of the Irish border ‘backstop’ being negotiated.

“Should the UK, or part of the UK, permanently or temporarily remain in the customs union then they will be treated in equal fashion as regards all their rights and obligations,” he said.

The European Commission’s chief spokesperson said on Thursday that there was “no breakthrough yet” in negotiations on the ‘backstop’ – the final major Brexit issue to be solved in order to get a deal over the line at next week’s European Council summit.

But Oettinger gave an upbeat assessment of the chances of success, predicting a breakthrough before next Thursday’s meeting and even within hours.

“I met Mr Barnier last Wednesday and certainly I believe we are making progress,” he said.