Deputy Prime Minister Nick Clegg has warned Tory rebels who combined with Labour to inflict a damaging defeat on the coalition that they have "absolutely no hope" of achieving their goal of forcing the European Union (EU) to cut spending.
Fifty-three Conservative MPs - including two tellers - defied the whips and joined Labour in supporting a rebel Commons amendment demanding ministers seek a real-terms cut in the next seven-year EU budget for 2014-20.
The announcement of the 307 to 294 vote defeat for the coalition - its first of significance since assuming power in 2010 - was greeted with loud cheers by Eurosceptics on the Tory benches.
However, a furious Mr Clegg has turned his fire on Labour, angrily accusing them of a "dishonest" and "hypocritical" change of policy for short-term political advantage.
In a speech to be delivered to the Chatham House international affairs think-tank - not normally the scene for such nakedly partisan political attacks - he will say that Labour was well aware there was "absolutely no prospect" of achieving a real-terms cut.
Earlier, a jubilant shadow chancellor Ed Balls - the target of much of Mr Clegg's anger - described the result as a "humiliating defeat" for Prime Minister David Cameron.
However, the Liberal Democrat leader insists that, with the majority of the 27 member states net recipients from the EU budget, he and Mr Cameron were "absolutely united" in the view that the best strategy for Britain was to press for a real-terms freeze, with the budget continuing to rise with inflation.
He said that under the proposals backed by Labour, failure to reach agreement next month in Brussels would mean the reversion to one-year budgets which would be even more costly to the UK.
"Their change of heart is dishonest, it's hypocritical. And worst of all, Labour's plan would cost the taxpayer more, not less," he is expected to say. "Because in pushing a completely unrealistic position on the EU budget - one that is miles away from any other country's position - Labour would have absolutely no hope of getting a budget deal agreed.
"We've been waiting for years for the Labour Party to finally announce how they would cut spending. Now they have finally come out in favour of cuts but in a way they know is undeliverable; and in a way that would hurt British taxpayers. And it turns out even their cuts cost money. I've heard people describe it as clever opposition politics - and I suppose it is. But it's not the behaviour of a party serious about government."
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