http://www.bbc.co.uk/news/world-europe-20459398
The talks had continued late into Thursday night.
A revised proposal from summit chairman Herman Van Rompuy keeps the spending ceiling in place but reallocates funds.
UK Prime Minister David Cameron told reporters in Brussels on Friday it was not "a time for tinkering" with the EU's 2014-2020 budget, and "unaffordable spending" should be cut.
He held talks with French President Francois Hollande and Dutch Prime Minister Mark Rutte.
German Chancellor Angela Merkel has said she doubts the summit will reach a deal and Mr Hollande has also cautioned that an agreement might not be possible.
The chances of success do not look great, the BBC's Matthew Price reports from Brussels.
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