Malta would lose almost €1 million of its entitlement if the European Commission proceeds to distribute the financial contribution of Iceland, Liechtenstein and Norway in the manner it is proposing.
Commission sources said Malta was insisting on a revision of the distribution mechanism adopted by the EU executive.
Despite not being part of the EU, Iceland, Liechtenstein and Norway trade freely in the European internal market. In order to form part of the so-called European Economic Area, they pay a premium to the EU, which is then distributed among members.
Under the Commission's proposal, Malta would be allocated about €1.6 million from the almost €2 billion to be shared by the 12 new member states together with Spain, Portugal and Greece.
However, Malta and a few other member states are calling for a revision of the calculations made by the Commission so that more updated data are used.
This includes recent GDP and other economic figures that will entitle Malta to a bigger share, estimated to reach an additional €1 million.
Asked to give details on the ongoing squabble with Brussels, the government preferred not to comment, given the ongoing discussions.
The government said talks on the European Economic Area financial mechanism for the period 2009-2014 were still ongoing. Last December, the Commission initialled an agreement with the EEA countries.
"On the basis of this agreement, the Commission will need to present a proposal for a Council decision, which requires unanimous agreement by member states," the government explained.
"Malta's share is being negotiated and still needs to be determined," a spokesman added.
EU sources said that although some headway had been made in the talks, the Commission was still insisting on using its distribution methodology.
"The Spanish EU presidency wants to move forward as soon as possible on this dossier and has already discussed the issue at length with the Maltese government and the Commission," the sources said.
"The presidency has even tabled a compromise on the issue but it seems more discussions are needed," the sources said.
Malta is already benefiting from €855 million in EU grants for the financial period covering 2007-2013. The extra funds from the EEA and the Norwegian Financial Mechanism would be over and above this allocation.