Ministers are pleading with rebel Tories to back David Cameron's threat to veto any rise in the European Union's long-term budget.
The Government is braced for a backbench mutiny as eurosceptic Conservatives and Labour MPs were set to back a rebel Tory bid calling for the Prime Minister to push for a real-terms cut in the EU's budget for 2014-20.
Mr Cameron insisted he would like to see a cut and would use the veto unless he got a deal which was "good for Britain". But this could mean accepting a rise in line with inflation in order to freeze the budget in real terms.
As the Commons debated the Government's position, Treasury Financial Secretary Greg Clark said: "We want to see the EU budget cut.
"Part of the negotiating mandate that the Prime Minister has agreed is that the very most that we would accept would be a real-terms freeze."
With the prospect of a knife-edge vote in the Commons, Mr Clark said: "If there is no cut or no real freeze, there is no deal. The framework will be vetoed.
"The Prime Minister has a formidable task in persuading other countries of this, many of whom were looking forward to a seven-year payout. He has made a strong start and he deserves the support of this House as he goes in to bat for Britain."
Mr Cameron earlier told MPs: "This Government is taking the toughest line in these budget negotiations of any government since we joined the European Union.
"At best we would like it cut, at worst frozen, and I'm quite prepared to use the veto if we don't get a deal which is good for Britain."
But Labour leader Ed Miliband accused him of "throwing in the towel" over a cut before the negotiations had even begun.