The UK presidency of the European Union (EU) is preparing to secure agreement on the EU's medium-term (2007-13) budget plans, and there are indications that it will compromise on the vexed issue of food production subsidies.

The Treasury this week branded as "unrealistic" European Commission proposals to double EU annual expenditure on research to €70bn (US$84.8bn) (over seven years). This marks a shift from the British position at the June EU summit, where it championed research spending over farm subsidies.

It also follows newspaper reports that London is prepared to cut a deal over the Common Agricultural Policy to secure a deal at the next summit, in December.