By Robin Emmott
BRUSSELS Fri Nov 7, 2014 3:40am EST
BRUSSELS Nov 7 (Reuters) - EU finance ministers will tell Britain on Friday that the only way to resolve a row over a surprise budget bill to Brussels is to pay in interest-free instalments, officials said, but Britain's finance minister insisted the bill was "unacceptable".
Italy, which holds the EU's rotating presidency, will present the instalment compromise at a ministerial meeting in Brussels, seeking to give British Prime Minister David Cameron a way to save face over the 2.1-billion euro ($2.6-billion) bill.
Interest on the late payments would also be waived.
The row has put Cameron, who told parliament he will not pay the bill in full, under pressure from Eurosceptics at home in the run-up to a general election in May. His EU counterparts are sympathetic to Britain because the bill is unusually large as it results from a statistical review stretching back over a decade.
"The demands for that Britain pays 1.7 billion pounds on the first of December is unacceptable," Chancellor George Osborne told reporters as he arrived for the meeting. "I will make sure we get a better deal for Britain."
But Osborne's counterparts and EU officials say it is out of the question to let Britain, Europe's third largest economy, contribute less, despite Cameron's promise to the British parliament that will not pay "anything like" the full amount.
"The rules for calculating that are not only quite precise, they are also just," Polish Finance Mateusz Szczurek told Reuters. "The budget contributions are based on gross national income and I don't really believe that they should be changed."
Ministers said they expect a political deal on Friday and the technical details to be worked out at another meeting on Nov. 14 in Brussels, before the Dec. 1 payment deadline.
EU officials say any deal has to strike a balance between Britain - which already receives a much envied annual rebate on its EU contribution - and those states, including Germany and France, which will benefit from the statistical revision.
The technical and legal details of how the regulation stipulating full payment on Dec. 1 can be waived also require work and could need votes by ministers and even EU lawmakers.
(Additional reporting by Jan Strupczewski and Alastair Macdonald; Editing by Alastair Macdonald)
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