Blair, who assumed the rotating EU presidency of Friday, said the 25-member bloc's social model should be modernised and quick action was needed in several areas including jobs, higher education, training, and innovation.

"This implies that we have a budget which reflects these realities," he said in an article written for Le Figaro newspaper, released on Sunday before publication on Monday.

"A modern budget is not a budget which, in 10 years, will still dedicate 40 percent to CAP (Common Agricultural Policy)."

He reiterated that any discussions on cutting in Britain's rebate from the EU coffers should be linked to CAP reform talks.

Britain won its rebate in 1984 when it was one of the poorer EU countries and got little back from Brussels in farm subsidies which at the time made up 75 percent of the EU budget.

Britain is richer now but says that even with the rebate its net contribution to the EU is much greater than that of France.

Blair reiterated the EU was more than a single market and those who insisted the bloc had to choose between free-market principles and social values were presenting a false choice.

He said Europeans were concerned about globalisation, job security, pensions, and living standards and wanted policies which would address such worries rather than fuel them further.

"Let us show them we are up to the job," Blair said.

He welcomed the debate under way about the future of Europe but added: "Debating is not the same as exchanging insults. Nor is it killing new ideas by treating those who want change like traitors to the European ideal."