UK's Cameron: EU budget deal still within grasp

* British PM: EU can still agree budget after talks

collapsed

* Says "deal can't come at any cost"

* Anti-EU party "at war" with Cameron's party, shuns pact

LONDON, Nov 26 (Reuters) - Britain believes European Union

leaders can still reach a deal to secure a long-term budget

after talks collapsed last week, but spending must be cut by

billions of euros if London is to back the plans, Prime Minister

David Cameron said on Monday.

In comments that will appeal to rebellious anti-EU lawmakers

threatening his authority and voters who see Brussels as a

wasteful "gravy train", he demanded cuts to European officials'

wages, pensions and perks.

"We do believe a deal is still do-able. It is in our

interests to get a deal. But that deal can not come at any

cost," Cameron told parliament after EU leaders failed to agree

the 2014-2020 budget, worth 1 trillion euros ($1.3 trillion).

Cameron has played up support he received from Germany,

Sweden, Finland, the Netherlands and Denmark for his calls to

limit spending, seeking to avoid the isolation and hostility

that often characterises Britain's fraught European relations.

Britain will seek to "galvanise a coalition of like-minded

countries" to curb spending, he added.

Facing a rising tide of anti-EU feeling in Britain, Cameron

is under pressure to control Eurosceptics in his ruling

Conservatives after they sided with the opposition Labour Party

to defeat him in a parliamentary vote seeking EU cuts.

'IT'S WAR'

Adrift from Labour in the polls, Conservatives fear rising

support for the UK Independence Party (UKIP), which wants

Britain to leave the EU, could hit them at national elections in

2015.

Concerns that UKIP, which has no seats in parliament, could

steal Conservative votes prompted one of Cameron's senior

legislators on Monday to propose an election pact.

Under the plan, Cameron would promise to hold a referendum

on Britain's membership of the EU in return for UKIP not

fielding candidates against Conservatives, also called the

Tories.

Cameron's office distanced itself from the idea and UKIP

rejected the pact.

"No deals with the Tories: it's war," said UKIP leader Nigel

Farage. His party received 3 percent of the national vote in

2010.

However, it finished well ahead of Cameron's pro-European

coalition partner, the Liberal Democrats, in a by-election this

month, taking a 14 percent share.

Cameron received support on his EU position from an

unexpected source - Conservative Mayor of London Boris Johnson.

An outspoken EU critic seen as a possible future challenger

to Cameron, Johnson withdrew his support for a referendum on

whether Britain should stay in the EU or leave.

Cameron, who wants to stay inside the EU, also opposes a

so-called "in/out" vote on Europe and has talked instead of

seeking voters' consent for a new EU role for Britain.

"The Tories are as split today as they've ever been," wrote

Tim Montgomerie, editor of the influential ConservativeHome

website. "Anything less than an in/out vote won't remove the

dagger from the Tory throat that is known as UKIP."

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