LABOUR was accused of “short-termism” by voting with Tory rebels to inflict a damaging defeat on the coalition Government over Europe.

Business Secretary Vince Cable said Labour had shown itself to be “tactical in its thinking” by supporting a rebel Commons amendment demanding ministers seek a real-terms cut in the next seven-year European Union budget for 2014-20.

The government was defeated by 307 to 294 votes in the Commons – after Labour joined 53 Conservative rebels.

It was the first significant defeat for the coalition since assuming power in 2010 and is thought likely to weaken Prime Minister David Cameron’s position in forthcoming EU budget talks.

Speaking during a visit to the Textile Centre of Excellence in Huddersfield, Mr Cable said: “There was a big Conservative rebellion and we know they have a lot of problems with people on the right wing of the party.

“The Labour Party was very short-termist and tactical in its thinking, but the point is that the government wants to see our contribution to the EU cut. No-one is disputing that.

“We have the same aims of wanting to see the European budget reduced and the EU to become more efficient.

“We have allies in Europe, but we have to work with them to make our case rather than taking up positions that are not realistic.”