David Cameron has said Brussels has to stop "picking the pockets" of the public amid growing pressure for him to reject budget hikes this week.

The Prime Minister said it was "not credible" for the EU's funding package to escape austerity, and demanded cuts for highly-paid officials.

Speaking at the CBI conference in central London, Mr Cameron said he was "a good European", but he signalled he was ready to take a tough line in negotiations on the 2014-20 budget.

"I make absolutely no apologies for standing up strongly for Britain in Europe on some of our priorities," Mr Cameron said. "Back here in the UK I have frozen some benefits, I have frozen people's pay, I have cut some budgets by 30%.

"I have actually cut the police budget by 20%. It is simply not credible to go to Europe and say we have made all these difficult decisions at home but when it comes to the European budget we are going to see it go up and up and up.

"I don't think it makes you a bad European because you want a tough budget settlement in Europe. I think it makes you a good European. I think I have got the people of Europe on my side in arguing that we should stop picking their pockets and spending more and more money through the EU budget, particularly when so many parts of the European budget are not well spent.

"One of the interesting things about the proposals so far in this debate about the EU budget is how little attention there has been on the central costs of the EU, the commission budget, what people get paid."

Mr Cameron is being squeezed from all sides after Parliament voted to demand a real-terms cut in the EU's multi-year package. He claims securing a real-terms freeze - rather than the increases demanded by the commission - would be a significant achievement. However, the Tory leader is also facing renewed demands from his backbenchers to commit to a referendum on Britain's relationship with Europe.

The Prime Minister attempted to soothe backbenchers by promising a broader crackdown on "excessive European legislation". He told the CBI conference: "It holds us back. It clogs things up. So we are fighting back hard.

"We're having EU accounting rules reduced and micro-enterprises exempted. This is about finally getting that ratchet of European legislation to start going in the opposite direction, and every summit I go to, every meeting I have with other leaders, I am making that happen."