The deadline for paying the EU's £1.7bn budget demand could be delayed, possibly until after the next election, under plans being considered in Brussels.
One of the options on the table is to move the deadline for payment from 1 December to a later date - and The Telegraph reports that 1 June was the "foreseen new deadline".
Proposals that have been circulated would see the bill being paid in instalments next year, rather than in full on 1 December. Punitive interest payments would also be waived.
Prime Minister David Cameron has insisted he will not pay "anything like" the £1.7bn demanded and warned there would be a "major problem" if the EU insisted on that amount.
Chancellor George Osborne, who is attending a meeting of Economic and Financial Affairs Council (ECOFIN) ministers in Brussels, has started negotiations with the intention of delaying and reducing what the UK should pay.
Speaking before the meeting, Mr Osborne said the demand is "unacceptable", and pledged to "get a better deal for Britain".
Meanwhile, Mr Cameron, at a meeting of northern European leaders in Helsinki, tried to gain support for Britain's position.
His official spokesman insisted the UK would not pay the full £1.7bn, saying: "The Prime Minister's view that he will not pay anything of that scale remains entirely unchanged."
The meeting is part of a two-day summit of Scandinavian and Baltic state leaders called the Northern Future Forum, which aims to promote growth and economic reform throughout Europe.
Mr Cameron told leaders from Finland, Estonia, Sweden, Denmark, Iceland, Latvia, Lithuania and Norway the demand, and the short notice, is "unacceptable".
According to Downing Street, Mr Cameron insisted the bill could not be treated as a "purely technical transaction".
The primary aim of the meeting is to promote growth and economic reform throughout Europe, but Downing Street said beforehand the PM would be raising other issues, such as budget control and migration.
Mr Cameron's hopes of winning allies in his attempt to curb internal migration within the EU have been met with strong resistance from other European leaders, including hosts Finland.
Sweden and Germany's opposition to migration reform have made the PM's task very difficult.
UKIP leader Nigel Farage said on his LBC radio phone-in that Mr Cameron is in a "real mess" and added: "From my knowledge of Europe and my knowledge of David Cameron, if he plays the tough man and doesn't pay it by December 1, he will pay it on December 2."
The Labour Party has also piled on the pressure, with Ed Balls and Douglas Alexander saying "the Government must have all eyes on the detail of the deal being discussed, not looking back over their shoulders at the Eurosceptic backbenchers who still seem to be pulling the strings".
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