Prime Minister David Cameron is set to create a storm of protest from both sides of the House of Commons over his stance on the European Union's long-term budget.

Cameron wants to see the budget stay at its current levels but many Tory MPs have signed an amendment supporting a dramatic cut while Labour has also called for a reduction.

The spat has emerged following moves from the European Commission to impose a 5% budget hike. This would see it rise to £826bn for the five year period up to 2020, compared to the current 2007-2013 cycle.

British MPs are on the cusp of thrashing out their views on the EU's 2014-2020 budget proposals - known as the Multiannual Financial Framework (MFF) - with both the UK and other EU countries calling for a reduction due the tough austerity measures in place across the continent.

But before the European Commission's proposals can become law, all member states and the European Parliament must be in full agreement.

While Cameron has stated that an above-inflation increase would be 'inappropriate', he has said that he would be happy to scotch any unacceptable proposal with his veto.

Around 50 Conservative MPs want him to call for real-term spending to be slashed - a move that the Labour opposition has intimated it may back.

MEPs are pressing for a minimum of a budget freeze on several areas of the budget and major budgetary increases in areas such as small business, research and innovation and competitiveness.

A budget summit for EU chiefs is set to take place on 22 - 23 November. Should no agreement be forthcoming by the end of 2013, that year's budget will be extended into 2014 with a provision for a 2% rise to cover inflation.

The UK contributed some £5.85bn to the EU budget in 2011.