The Government's priorities for forthcoming EU budgetary negotiations have come under fire at an Oireachtas committee.

Stephen O'Sullivan, assistant secretary in the Department of Finance, told the Joint Committee on European Affairs yesterday that the Government would pursue the protection of the Common Agricultural Policy (Cap) as one of its first priorities in the new EU budget.

After this would come keeping budget contributions "within bounds", getting a good deal on rural development and agreeing the best deal for Irish competitiveness and for cohesion, Mr O'Sullivan said.

Ruairí Quinn, spokesman on European affairs for the Labour Party, said that competitiveness and cohesion should be moved up the list to become the first priority.

Safeguarding the Cap, which he said affects 100,000 households, should be of least importance, Mr Quinn said.

He accused the Department of Finance as acting as "control freak" rather than as "developmental agency" in its position.

"We're living in a time warp that goes right back to 1973," said Mr Quinn in reference to the date of Irish accession to the EU.

"What we need is a complete reversal of our priorities."

Negotiations on the financing of the EU for the seven years between 2007 and 2013 are expected to come to a head in Luxembourg next month.

The discussions will be more complex than ever before since they will involve 25 member states and two future accession countries.

Most debate to date has focused on the proportion of the EU's gross national income that should be devoted to financing the EU's existence.

The European Commission has proposed that 1.26 per cent of gross national income should be allocated to the EU budget.

However, the six states that contribute most to the EU are pushing for a 1 per cent ceiling.

Mr O'Sullivan said the Republic was not part of this "1 per cent club" but he acknowledged that eventual agreement would probably be closer to this level than 1.26 per cent.