Euro-MPs have challenged David Cameron and other EU leaders to drop their austerity budget plans for Europe and boost spending for the next seven years.
They threw down the gauntlet in a 506-161 vote rejecting a summit deal last month which amounted to the first-ever real-terms cut in the EU's long-term spending plans.
At the time Mr Cameron heralded a major breakthrough in overcoming EU Commission and European Parliament demands for more spending, and applying national-style austerity measures to the 2014-2020 EU spending programme. The Prime Minister said austerity-hit citizens would expect nothing less than belt-tightening in Brussels.
But now a majority of MEPs have demanded more, triggering a round of negotiations between national governments. the Commission and the European Parliament.
Leader of the European Conservatives Martin Callanan accused a majority of MEPs of "flying in the face of public opinion" by dismissing calls for belt-tightening and even pressing for new EU tax-raising powers to fund spending.
"The European Parliament is engaging in the worst kind of posturing, which makes it look completely out of touch with reality," he said. "The EU budget deal was a reasonable compromise between many competing demands".
Mr Callanan said EU leaders should now "stand firm" behind the budget figures agreed last month: "We can accept that there should be some budgetary flexibility and a mid-term review of spending but EU tax-raising powers would only see European taxpayers forced to pay for every pet project the EU dreams up. This would be a bad outcome for the European economy."
But Socialist leader in the European Parliament Hannes Swoboda vowed that MEPs would fight for an "improved" budget.
He said: "We are ready for serious negotiations and we hope that governments will be as serious and responsible as the European Parliament. We should work together for a result which is more responsive to the needs of the citizens and to global competition." The attempt to peg spending at a real-terms freeze was "simply not acceptable".
EU budget commissioner Janusz Lewandowski said there should now be some urgency in finalising a deal: "We owe this to 500 million Europeans, to our businesses, towns and regions, scientists, students, NGOs and all those who benefit from EU funds: to reach an overall agreement as well as to complete the work on each sectoral policy in order to be fully ready by 1 January 2014."