The summit of European leaders in Brussels aimed at agreeing on a new European Union budget has ended without a deal. 

The talks were aimed at deciding how the EU will be funded over the next 7 years.

They also stalled overnight.

European Council President Herman van Rompuy will reportedly circulate a new draft budget to the 27 EU leaders before talks resume at a later date.

The German Chancellor Angela Merkel is due to hold a press conference to explain why the summit was abandoned.

Stalled talks

Earlier it was reported that tensions between rich and poor countries along with demands from Britain for austerity had pushed the talks to the brink.

The UK is pushing for deep cuts at EU level during a time of austerity in many Eurozone countries.

The German Chancellor raised the prospect of a second summit in the coming months to nail down a deal saying if a second round is needed leaders will take the time necessary for that.

The Taoiseach Enda Kenny is among the leaders attending the second day of talks.

The budget is to run from 2014 to 2020 and the talks come as pressure mounts for massive cuts to the budget as a result of the continuing economic crisis.