Lord Hill, Britain’s new EU commissioner, has called for calm in the row over the demand for an increase in Britain’s EU budget contribution. David Cameron has insisted the UK will not accede to the demands, with a number of Conservative backbenchers calling for the Prime Minister to refuse the payment, especially in the runup to the Rochester and Stroud by-election this month. The EU could, from 1 December, impose fines on the UK in the form of interest at an initial annual rate of 2.5%.

UK officials are confident that a solution can be found, possibly by granting Britain permission to pay instalments on a monthly or quarterly basis, thereby avoiding fines. The story has reignited questions over the UK’s future membership of the European Union, with Labour leader Ed Miliband pressed David Cameron to confirm that he will never recommend Britain vote to leave the EU during Prime Minister’s Qustions this week – a guarantee the Prime Minister would not make.