UK Prime Minister David Cameron says there is a "real problem" with a lack of progress in EU budget talks as they enter a second day.
Mr Cameron said it was not the time for "tinkering" with the money spent.
Instead, he told reporters, the EU needed to cut "unaffordable spending" as had been done in the UK.
Talks on the 2014-2020 budget resume at noon after Thursday night's discussion. Most EU members want a budget increase, but the UK and some others oppose that.
President of the European Council Herman Van Rompuy circulated a revised proposal for the new budget at the start of the two-day summit and said he believed a compromise was possible.
But German Chancellor Angela Merkel said after Thursday's talks: "I think we're advancing a bit, but I doubt that we will reach a deal."
French President Francois Hollande also cautioned that an agreement might not be possible: "We should not consider that if we don't get there tomorrow or the day after, all would be lost."
The 90-minute session late on Thursday followed a gruelling day of face-to-face meetings between Mr Van Rompuy and each of the bloc's leaders, followed by a flurry of backroom discussions.
Arriving for talks on Friday, Mr Cameron showed little signs of being happy with the talks so far.
He said: "Well I don't think there's been enough progress so far.
"There really is a problem... there hasn't been the progress in cutting back proposals for additional spending.
"It isn't a time for tinkering. It isn't a time for moving money from one part of the budget to another. We need unaffordable spending cut. That's what's happening at home, that's what needs to happen here."
Rebate 'justified'The EU Commission, which drafts EU laws, has called for an increase of 4.8% on the 2007-2013 budget.
The UK is the most vocal of EU member states seeking cuts in the budget to match austerity programmes at home
"No, I'm not happy at all," Prime Minister David Cameron said about Mr Van Rompuy's offer to cap spending at 973bn euros (£783bn; $1.2trn).
- A deal after intense negotiations which may continue into the weekend
- Failure to agree and a follow-up budget summit
- If no agreement is reached by the end of 2013, the 2013 budget ceilings will be rolled over into 2014 with a 2% inflation adjustment, amid uncertainty over long-term EU projects
A Downing Street statement after Thursday's meeting said Mr Cameron had stressed the importance of the UK keeping its budget rebate, worth 3.5bn euros in 2011.
The statement called the rebate "fully justified". The EU Commission and some EU governments want the rebate scrapped.
Mr Cameron has warned he may use his veto if other EU countries call for any rise in EU spending. The Netherlands and Sweden back his call for a freeze in spending, allowing for inflation.
Poland and its former-communist neighbours, which rely heavily on EU cash, want current spending maintained or raised.
Mr Hollande has also called for subsidies for farming and development programmes to be sustained for poorer nations. France has traditionally been a big beneficiary of EU farm support.
Failure to agree on the budget would mean rolling over the 2013 budget into 2014 on a month-by-month basis, putting some long-term projects at risk.
Analysts say that could leave the UK in a worse position, because the 2013 budget is bigger than the preceding years of the 2007-2013 budget round.
The UK government could then end up with an EU budget higher than what it says it will accept now.
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