9 October 2002 01:14 BDT

By Andrew Grice, Stephen Castle and John Lichfield 29 October 2002

Relations between Britain and France were in deep freeze yesterday after it was revealed that Tony Blair and Jacques Chirac had a stand-up row at the European Union summit in Brussels.

The French President was so incensed by the Prime Minister's attempts to water down a Franco-German agreement on the future of the Common Agricultural Policy (CAP) that he told Mr Blair he would scrap the annual summit of British and French ministers, due to take place in December.

As EU leaders adjourned their session on Friday afternoon, President Chirac told Mr Blair: "You have been very rude and I have never been spoken to like this before."

EU sources revealed that the two men also clashed on Thursday night during the formal summit dinner, when the French President described Britain's annual £2bn EU budget rebate as unjustified.

Downing Street admitted yesterday that there had been "a vigorous exchange" at the summit but denied that Mr Blair had been rude to Mr Chirac. Blair aides claimed the French President was "piqued" that the Prime Minister had won the summit's backing for the EU to press ahead with an immediate review of the CAP ­ against France's wishes.

The aides also suggested that Mr Chirac was "miffed" that Germany's Chancellor, Gerhard Schröder, visited London rather than Paris after being re-elected last month.

But the suspicion in Paris is that Britain has hyped up the row in an attempt to mask Mr Blair's embarrassment at the Franco-German deal to maintain farm subsidies, which was struck before the summit.

Officials at the Elysée Palace confirmed that there had been heated words between the two leaders but declined to reveal exactly what was said. "There was a spat but that's common at summits. Our view is 'c'est la vie' and life goes on," one official said.

British diplomats dismissed Friday's bust-up as a "storm in a teacup" and are working to mend fences with the French. They hope the meeting of ministers due to take place in Le Touquet will still go ahead. French officials said last night they hoped to reschedule the summit early in the new year. Asked if the delay was connected to the row in Brussels, they said that it would be "wrong to assume that there was no connection".

Mr Blair insisted in the Commons yesterday that he had not been isolated at the summit. He backed the Franco-German deal on the level of farm spending but insisted that the EU leaders were right to press ahead with reform before 2006, which would have been "dead in the water" under the French proposals.

Iain Duncan Smith, the Tory leader, taunted the Prime Minister over the row and claimed Britain had been "sidelined" on CAP reform by France and Germany. "A deal to extend the life of the CAP has been struck behind Britain's back. Will you tell the British taxpayer how much more they are going to have to pay to foot the bill for your failure?" he asked Mr Blair.

Meanwhile, Franz Fischler, the EU's agriculture, rural development and fisheries commissioner, insisted that his interim reforms remained on the table.

-- Anonymous, October 29, 2002