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David Cameron has said a deal on the EU's long-term budget is "still doable" and it is in Britain's interests to try and reach an agreement.

In an update to MPs, the prime minister said the UK rejected "unaffordable" spending commitments proposed for 2014-2020 at last week's summit in Brussels - which broke up without success.

The "deal on the table was not good enough", he told Parliament.

Labour said the UK had failed to build alliances needed to obtain a deal.

But Mr Cameron - who pushed for a minimum real-terms freeze in spending - said that the UK's call for cuts had been backed by Germany, Sweden and the Netherlands among others.

The failure to agree a deal at the first time of asking was "disappointing" but the deadlock would give European leaders "further time to reflect on public opinion within their own countries" before negotiations resume.

He said the UK and its allies had been clear they were not being tough on spending at home only to sign up to big increases in Europe.

'Put down a marker'

The prime minister said the UK had tabled "reasonable" proposals to reduce spending - in areas such as agriculture, administration and bureaucracy - but EU officials had failed to build on these and focused instead on "redistributing money to buy off different countries".

"In a seven year budget of almost a trillion euros, the idea that there are no savings to be found is simply not credible."

Planned changes to the UK's rebate proposed would have cost £1bn a year and would have been "completely unacceptable", he added.

"We have put down a marker at this Council," he said. "We stood up for the taxpayer. Together with like-minded allies we rejected unacceptable increases in European spending...We are fighting hard for the best deal for Britain and that is what we will continue to do."

Securing a deal was in the UK's interest because failure to do so would mean that annual settlements would be rolled over and this could end up costing the UK more, he told MPs.

'Divided'

Labour leader Ed Miliband said the Conservatives were divided over Europe and the prime minister was "being dragged to the exit door" by backbenchers and certain cabinet ministers who were "undermining his authority" by urging an "in-out referendum" on the UK's future in Europe.

"As we anticipate further negotiations in the months ahead, the wider stance of the government towards the EU will also have an impact," he said.

"The prime minister has said repeatedly he is in favour of Britain remaining a member of the EU, but why is he allowing his colleagues to take the opposite position?

"Last month, the education secretary briefed that he is open to leaving the EU, on Saturday the chairman of the Conservative Party said we should threaten to leave if we didn't get a good deal.

"Now we have the new vice-chair of the Conservative Party touring the studios not about a budget deal, but a deal with the UK Independence Party."