Conservative eurosceptics have combined with Labour to hand David Cameron a bitter personal defeat on the EU budget this evening.
Tory MP Mark Reckless' amendment demanding that the prime minister adopts a negotiating position calling for a real-terms cut to the EU budget for the 2014-2020 period was voted through by 307 votes to 294.
Tonight's vote is non-binding, meaning that Cameron can still carry out his preferred tactic of arguing for a real-terms freeze in the EU budget in next month's crunch talks.
But Conservative backbenchers loyal to the prime minister told politics.co.uk that Cameron's personal authority has been seriously undermined by the result – both within the Tory party and at the negotiating table.
Following the conclusion of next month's talks the Commons will have to vote again if a deal between the EU's 27 member states is eventually reached. Tory MPs sympathetic to Cameron have warned that it will be far harder for the prime minister to argue Britain's position with the threat of another parliamentary defeat hanging over him.
The crunch division followed three hours of passionate debate in which MPs on both sides of the Tory divide argued their approach would strengthen Cameron's hand.
Former minister Sir Tony Baldry summed up the pro-government position by suggesting Tory rebels calling for a real-terms cut were guilty of "self-indulgence".
That led rebel Mark Pritchard to counter by claiming that the "ultimate act of self-indulgence" would be to ignore the will of the British people, who he said were angered by rising EU spending.
Treasury minister Greg Clark, speaking for the government, adopted a staunchly eurosceptic line but ultimately failed to win over wavering backbenchers.
"We are ready, willing and able to veto, and we urge the House to stand with us as the prime minister goes to negotiate for us," he said, finishing the debate.
Eurosceptics on the government benches could not have beaten a frantic whipping operation without the support of the Labour party. Ed Miliband was accused of "opportunism" at prime minister's questions earlier, but argued that tonight's vote was an "opportunity to get a mandate" from the Commons to call for a real-terms cut.