George Osborne has described his efforts to cut the surcharge Britain will pay towards the European Union budget as a "real win" after being accused by Labour of "trying to take the British people for fools".
The Chancellor and the Prime Minister claimed to have halved the UK's £1.7bn bill from the EU but critics said the reduction would have been achieved by bringing forward a rebate to which the UK would have been entitled anyway.
Mr Osborne and Mr Cameron have argued that it was not certain that the rebate would apply to the surcharge, which was demanded after a recalculation of Britain's gross national income relative to the other 27 member states, until the deal was struck in a summit with fellow EU finance ministers in Brussels.
The Chancellor defended their stance, saying: "Everyone said we were going to have to pay £1.7bn (but) instead we are going to have to pay half that so no-one should be in any doubt this is a real win for Britain."
He added: "It shows this Government can deliver for Britain in Europe.
"Every time the Government sets out the goals it wants to achieve in Europe people say they're impossible to achieve.
"When we do achieve them, like cutting the European budget or getting out of the bailouts or now reducing this bill, people say that was inevitable. Well people shouldn't be in any doubt, it's a real win."
Labour has claimed the deal does not save the UK "a single penny", while the Chancellor's European counterparts also appeared to contradict his account of the deal.
Irish finance minister Michael Noonan said he believed that the UK "will pay the whole amount" while Dutch finance minister Jeroen Dijsselbloem said "it's not as if the British have been given a discount".
The European Commission's vice-president with responsibility for the budget, Kristalina Georgieva, said the additional contribution being demanded from the UK meant that its rebate was also increased, leading to a "downward correction" in the overall sum to be paid.
Shadow Chancellor Ed Balls said: "David Cameron and George Osborne are trying to take the British people for fools.
"Ministers have failed to get a better deal for the British taxpayer. Not a single penny has been saved for the taxpayer compared to two weeks ago when David Cameron was blustering in Brussels.
"By counting the rebate Britain was due anyway, they are desperately trying to claim that the backdated bill for £1.7bn has somehow been halved. But nobody will fall for this smoke and mirrors.
"The rebate was never in doubt and, in fact, was confirmed by the EU Budget Commissioner last month."
UKIP leader Nigel Farage said: "Osborne (is) trying to spin his way out of disaster.
"Borrowing what we are rightfully owed in the future to pay an unfair bill being levied now is not a victory. It's a sham."
The bill is now due to be paid after the next General Election, rather than on 1 December as originally demanded by the EU.
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