David Cameron will push for cuts to EU red tape after fending off an apparent effort by France to shave hundreds of millions of pounds off Britain's EU rebate.

The Prime Minister stepped in to "lock down" details of a new multi-year budget deal, after concerns were raised about drafting, when he arrived in Brussels on Thursday for the two-day summit. The issue centred on whether the agricultural grants to new EU members should be included in calculations for the UK rebate.

French negotiators are said to have argued that the rural development spending should be excluded from the sums - potentially reducing the £3 billion annual rebate by 10%. But Mr Cameron is adamant that the issue was settled in the UK's favour by EU leaders back in February.

Downing Street sources indicated that European Council president Herman Van Rompuy had assured him the position had not changed, and the agricultural spending would be included in rebate calculations.

Speaking before the talks, Mr Cameron said: "It is absolutely essential that we stick to the deal we reached in February and that we protect the British rebate, and I will make sure that we do that. What this council should be about is doing in Brussels what we are doing in Britain, which is getting control of spending, making sure we live within our means, and then making ourselves more competitive, getting rid of regulations, making it easier for businesses to create jobs. That is what we are doing in Britain, that is what we need to do in Brussels."

Earlier, it emerged that the European Parliament had backed down after months of resistance to the seven-year EU budget. The ceiling for spending from 2014-2020 will fall for the first time to 908 billion euro (£776 billion), as national leaders agreed in February. The 136 billion euro (£116 billion) budget for 2014 is nearly 6% lower than this year.

But there is still criticism that administration costs will be rising, while MEPs claim they have negotiated guarantees that the full budgets will be used - unlike previous years when there have been large underspends.

Mr Van Rompuy has declared improving the job prospects of young people the main theme for the two-day gathering. Some 5.6 million are out of work in the eurozone, and in Greece and Spain the unemployment rate has rocketed to over 50%. The council president is emphasising the need for money to be pumped into projects that could boost their employment chances.

But Mr Cameron is also taking the opportunity to urge looser labour market rules and deregulation to help small and medium sized companies. The premier has staked Britain's continuing membership of the EU on his ability to negotiate fundamental reform of it - with an in-out referendum due to be held in 2017 if the Tories win the general election.

On Thursday night, Mr Cameron was due to take a Brussels-funded colouring book into talks with leaders. He was expected to use the "Mr & Mrs MEP" book - which details the life of a politician in the European Parliament - to underline his point that there is still too much waste in the EU.