European Union leaders are due to begin a two-day summit in Brussels to try to strike a deal on the next seven years of EU spending, BBC News reports.

High EU expenditure at a time of cutbacks and austerity across the continent is the main issue dividing the 27 member states. They failed to reach a compromise at a similar summit last November.

The summit will almost certainly demand cuts in EU administration. However, whatever is agreed still has to go to the European Parliament and MEPs are big backers of EU spending, the BBC says..

The EU Commission - the EU's executive body - had originally wanted a budget ceiling of 1.025tn euros ($1.4tn) for 2014-2020, a 5% increase. In November that was trimmed back to 973bn euros and later revised down to 943bn euros.

However, with other EU spending commitments included, that would still give an overall budget of 1.011tn euros.

The UK, Germany and other northern European nations want to lower EU spending to mirror the cuts being made by national governments across the continent.

Downing Street said on Wednesday, Feb 6, that Prime Minister David Cameron was intent on seeking an agreement to lower EU spending.

"The UK's position is unchanged since the November European Council - spending needs to be reduced further than the proposals on the table," a spokesman said. "The prime minister said in the [House of] Commons that he thought a deal would be difficult. That's not saying that it can't be done. The EU budget negotiations are always traditionally fairly difficult."

Another grouping, led by France and Italy, wants to maintain spending but target it more at investment likely to create jobs.

French President Francois Hollande told reporters that conditions were "not yet in place" for a deal but also signalled that Paris was prepared to make compromises.

He and German Chancellor Angela Merkel held talks in Paris on Wednesday before attending a France-Germany football match.

Merkel's spokesman said she and President Hollande had had "a short but intense meeting... to see what kind of agreement could be made".

In Brussels, a European Parliament spokesman warned that more severe cuts would leave the commission unable to do its job as the EU integrates more deeply in response to the financial crisis.