Taoiseach Leo Varadkar has ruled out the government supporting the EU's proposed budget, as it would result in Ireland paying out more money but receiving less funds from Brussels.

Mr Varadkar and Irish negotiators met European Council president Charles Michel and the European Commission president Ursula von der Leyen at 2am, after a late arrival in Brussels overnight.

But the talks saw Mr Varadkar reject spending proposals for the bloc, which would seriously impact on Ireland.

Speaking in Brussels today, the Taoiseach explained:

“The proposal on the table is one that we can't accept.

"Essentially it means that Ireland will contribute much more to the EU budget but we will actually receive less back in terms of payments to Irish farmers and also funds for regional development and social development.”

Mr Varadkar said Ireland accepted that, with a growing economy, it was obliged to pay more into the EU budget over the next seven years. But he added:

What we can't accept is in return for paying more, that we would see very significant cuts to CAP [farmer payments], and to cohesion funds. That is not something we can accept.

Mr Varadkar explained that he had made his objections clear to the council and commission presidents and that it was now unlikely today that there would be agreement on the EU's multiannual financial framework.

Ireland's position comes after EU leaders overnight clashed on the bloc's budget.

A tussle over the money comes as Britain leaves the EU, taking with it the previously planned €75bn in its contributions over the period 2021 to 2027.

German Chancellor Angela Merkel has warned there are "major differences" to overcome among the 27 countries

Richer and poorer nations are split on contributions while some leaders want funds allocated more on certain areas, such as defence.