European Union leaders have agreed the broad lines of a deal on the bloc's budget for 2014-202 that would fix total EU spending at €960 billion over the seven-year period.

"We feel pretty confident that we have the framework for a deal," said one EU official speaking on condition of anonymity. "The deal is not completely finalised, but we feel sure it will be done today."

Leaders will continue negotiating in the expectation that they can sign off on a final agreement later on today, the official added.

Prime Minister Lawrence Gonzi last night said that Malta continues to be optimistic that it will achieve a good deal in EU Budget talks despite increasing calls for further cuts.

Speaking to timesofmalta.com during a break in an EU summit meeting  Dr Gonzi said that Malta’s team of negotiators, led by EU Permanent Representative Marlene Bonnici, was examining the minute details of the latest proposals put on the table.

Sources close to the meeting said that Council President Herman Van Rompuy proposed a further €45 billion cut in the seven-year budget putting the overall figure down to €912 billion.

Most of the budget cuts will come from the administration of the EU.

Member states are divided in two groups, with the net contributors arguing for further cuts in order to reflect the austerity measures they are taking at home due to the ongoing economic recession and the net beneficiaries like Malta who want to preserve a good level of financing so that their economies continue to come closer to the EU average.