The Taoiseach is still expected to arrive in Brussels for high-level talks with EU counterparts in a bid to broker a deal on the the European Union (EU) budget.

European leaders are under pressure to agree on what funding should be allocated to each member state.

The Taoiseach has cancelled a high level pre-summit meeting with President of the European Council Herman Van Rumpoy and President of the European Commission this morning.

A meeting of heads of state and government of all 27 European countries is due to start this afternoon over intense talks regarding the EU budget.

'We all need to be ready to compromise'

The issue of Irish bank debt is now likely to be discussed amongst all member states depending on the outcome of the ECB governing council in Frankfurt later this afternoon.

Ireland has received broad political support for re-engineering of the promissory note.

It is expected that the Taoiseach will arrive at the summit in Brussels with a deal to be discussed with his European counterparts.

Speaking on Tuesday, President of the European Council Van Rumpoy said the bigger picture must not get lost in budget negotiations.