- David Cameron faces another major rebellion over Europe in tomorrow's crunch vote
- Up to 40 Conservatives have signed up to a call for a real terms cut in funding for Brussels
- A rival amendment calls for a cut or a freeze in a move aimed at deflating the rebellion
David Cameron, pictured on the steps of No. 10 today, faces another major rebellion from Tory MPs over Europe tomorrow
Up to 40 Tory MPs are ready to defy David Cameron to demand the European Union's budget is slashed until 2020.
The rebels are backing an amendment which will heap pressure on the Prime Minister to go further than his policy of calling for a freeze in spending from 2014.
And there are thought to be dozens more willing to vote to force Mr Cameron to take a tougher line with Brussels in a crunch Commons vote tomorrow.
But Downing Street told those wanting a deal on cutting the budget at next month's European Council they had to 'be realistic'.
A rival amendment demanding a cut or a freeze in the EU budget has been tabled by Tory MP Jacob Rees-Mogg in an attempt to limit the damage.
A year ago Mr Cameron suffered his biggest rebellion since becoming PM when 81 Tory MPs supported a referendum on Britain's membership of the EU.
Some are predicting the coalition's majority could be slashed to less than 20 if the rebellion picks up steam overnight.
Mr Reckless told MailOnline: 'There are around 40 down on the motion with a significant number of other people who have told us they will vote for it.'
But he admitted that Labour's attempt to embarrass the government by calling for a cut, having failed to secure one during 13 years in power, had made things harder for the rebels.
'It is a tough environment to persuade Conservatives to vote for something when they know that is going to mean going through the lobby with Labour.'
Downing Street today played down the significance of tomorrow's vote, which was discussed at Cabinet this morning.
A spokesman could not even say if the Premier planned to vote himself.
The left-of-centre think tank IPPR said Britain should offer to give up some of its annual rebate from the EU to help secure real-terms cut in the Brussels budget.
It said such a 'grand bargain' could be sold to the British public if the budget cuts were deep enough to ensure that the UK's contribution still dropped overall.
Mr Cameron has vowed to maintain the rebate - won by Margaret Thatcher in the 1980s - as he prepares for tough negotiations at a European Council summit next month.
He is opposing proposals from the European Commission that would see a five per cent hike over the next seven years and has threatened to veto any rise above inflation - currently around two per cent.
But he faces the prospect of an ambush from angry Tory backbenchers.
Yesterday Labour also called for a cut in the budget, but faced charges of opportunism from some Tories.
The move, by shadow chancellor Ed Balls, could yet backfire as many Conservatives will be reluctant to hand a PR coup to the Labour party.
Asked how Mr Cameron felt about tomorrow's vote, his spokesman said: 'It is an important issue. We have been saying for some time that the decision on the EU budget needs to reflect the decisions taken by the European countries on their domestic budgets.
'It is a major issue and it is not surprising that Parliament wants to discuss it.'
However, the PM's official spokesman told a briefing of journalists in Parliament that next month's talks would be 'challenging' and an agreement was not realistic.
A compromise amendment, calling for a cut or freeze in the EU budget, has been tabled by Tory MP Jacob Rees-Mogg
'There are 27 counties around the table. A large number of those countries are net recipients of the EU budget so they get more out than they put in and you wouldn't be surprised that there are different views around the table,' he said.
'We should be realistic about the outcome of the council. It is not going to be straightforward to reach agreement. It is a difficult negotiation.'
But he refused to be drawn on what happens if a deal is not done.
'As to what might happen after that, we need to see what happens. Either everyone signs up to the deal of the deal doesn't get done.'
The main rebel amendment has been tabled by Tory MPs Mark Reckless, Mark Pritchard, John Redwood, Bill Cash, Sarah Wollaston and Zac Goldsmith.
It calls on the Government to 'strengthen its stance' so that the next EU budget from 2014-2020 'is reduced in real terms'.
However, the amendment tabled by Mr Rees-Mogg states: 'further regrets the substantial increase in the UK's net contribution to the EU in the previous financial perspective; reject proposals for EU financial transaction taxes, and calls on the Government to veto anything other than a cut or freeze in the seven year MFF.'