DAVID Cameron demanded the European Union (EU) slash its administration bill by at least £4.8 billion as budget negotiations got under way last night in Brussels.

The Prime Minister teamed up with the leaders of Germany and the Netherlands to present a raft of potential savings in pay and pensions for the EU's civil service during "animated" discussions with European Commission President Jose Manuel Barosso.

Within hours, other European countries had signalled they also wanted cuts.

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Mr Cameron is aghast the EU wants to raise the amount it spends on back-office functions from £45bn to £51bn.

Around three-quarters of the cost relates to the more than 40,000 staff involved. Among their perks is a generous pensions scheme which entitles them to 70% of their final salary. The UK has suggested this be cut to 60%.

The Prime Minister also proposed a 10% cut in the wage bill and the raising of the retirement age to 68. The moves would save £4.8bn, but the UK believes other savings are possible.

It states that some Whitehall departments have been cut by one-quarter or even one-third.

A British official said: "We are looking to cut tens of billions (from the overall budget) and we don't know why you cannot find £10bn here."

Mr Cameron held private talks with Mr Barroso and the European Council president Herman Van Rompuy. Mr Cameron had declared he was "not happy" with Mr Van Rompuy's proposed EU budget.

Last night, after one-to-one discussions with all 27 EU leaders, Mr Van Rompuy was due to present a revised plan.

The UK is calling for at least a freeze, if not a cut, in the Budget. Mr Cameron faces pressure to come home with a deal he can sell to taxpayers. Last month Tory backbenchers defeated the Coalition in a Commons vote urging the PM to push for a cut.

The UK is also bidding to protect its rebate, worth more than £3bn last year. Many countries are proposing changes to the way it is calculated.

Mr Cameron said this would be unacceptable.

Downing Street highlighted the challenge, pointing out 17 of the 27 countries get more out of the EU than they put in.

German Chancellor Angela Merkel has played down the chances of a deal this week. She said: "Germany wants to reach the goal but it may be that we need a further stage."

The EU is believed to be resisting the cuts. Officials say its need for skilled staff will rise as its functions increase.

Figures released this week showed that in the course of the last multi-year budget, Scotland received around £1.5bn directly for structural, rural development and fisheries funds as well as direct support to farmers worth around £500 million a year.

This week the Scottish Government said it expected these amounts to fall over the 2014 to 2020 period but said they would still be a "significant source of funding".

Over the same period Scotland was forecast to receive a total of £992m from the European Social Fund and the European Regional Development Fund.

l The UK and Scottish Governments were in a war of words over the budget last night.

Scottish Secretary Michael Moore accused Scottish ministers of demanding the EU budget is cut "but that Scotland should receive more money." He added: "The SNP knows that if the budget goes down less money will come to Scotland – with all that means for agricultural support, structural funds and other funding."

A spokesman for the Deputy First Minister Nicola Sturgeon said: "Mr Moore is wrong. An independent Scotland with a seat at the top table will be able to speak with its own voice to get the best deal possible for everyone living in Scotland – instead of being shut out of EU meetings as at present when these key decisions are taken."