EU budget talks collapsed because the deal on the table was "just not good enough", Prime Minister David Cameron said.
Speaking in Brussels after the summit ended without agreement, he hit out at EU institutions for failing to curb the high pay and perks of its bureaucrats.
He told them it was time to "adjust to the real world" and said the Commission "didn't offer a single euro in savings, not one euro, and I just don't think that is good enough."
He said: "Brussels continues to exist as if it is in a parallel universe."
The European Council president, Herman Van Rompuy, called off the summit after leaders remained deeply divided after two days of negotiations, rather than try to continue into the weekend.
Mr Cameron said a deal to set out the spending priorities of the EU over the next seven years could be done in the future but that it could not be a "deal at any cost."
The Prime Minister has argued for a budget freeze when the EU is demanding an above inflation increase in 2014-2020 spending. He has also been fighting to keep the rebate that was secured by Margaret Thatcher when she was in power.
He insisted Britain was not alone in opposing the budget proposals and said a number of other countries, which also receive more than they donate, had found the deal unacceptable.
Sky's Robert Nisbet, in Brussels, said this is not the end of the road for the talks and they will continue into the new year.
"What is likely to happen is a third budget proposal will be sent out to all 27 countries, they'll go away and discuss it, try to find some common ground and then come back here at the start of next year to try to negotiate it.
"But by then they are starting to run out of time because all of this has got to be implemented at the start of 2014."
Mr Cameron demanded billions in pay and pension cuts from the EU's civil service and presented EU heads with a paper setting out how Brussels could slash at least 6bn euro (£4.8bn) off its staff costs.
His measures included upping retirement ages, lowering pensions and trimming lavish salaries.
The French President, Francois Hollande, said: "Progress was made. There were no threats, no ultimatums.
"(German Chancellor) Angela Merkel and I both agreed that it would be better to take some time out, because we want there to be an agreement."
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