George Osborne has said the "real test" of the coalition’s authority will come when an EU budget proposal is put before MPs.

The Chancellor was speaking to the BBC when he made the comments after Tory rebels, backed by Labour, defeated the government and called for cuts in EU spending between 2014 and 2020.

He accused Labour of being opportunistic.

The opposition described Wednesday’s defeat as a humiliation for the PM.

The Conservative split over Europe is being compared to a similar situation that occurred in John Major’s government in the 1990s.

The defeat came despite Cameron’s promise to veto any budget deal that was not good for Britain.

The amendment was passed following a European Commission proposal to increase spending by 5% between 2014 and 2020.

Mr Osborne told BBC Radio 4's Today programme "I want a cut in the EU budget, David Cameron wants a cut in the EU budget.”

The chancellor said he and David Cameron were determined to "end the outrageous increases in European spending".

"We've got to listen to what the House of Commons said last night. We've got to listen to all Conservative MPs and coalition MPs," he added.

Former Conservative minister Sir Tony Baldry told the Today programme: "If colleagues want the Conservative Party to be in government after the next general election then we're going to have to start supporting the prime minister when he goes to negotiate on behalf of Britain."

Conservative rebel Sarah Wollaston told the programme her party was "absolutely united on Europe" and said the PM had been given a mandate to push for a "real cut".

"I don't know a single Conservative MP who wanted to see an increase in our contributions by £300m a year, because that's what we mean by a real terms freeze. It's still, in fact, an increase from us."

(IT)