UK defends refusal to pay EU bill as press shakes fist at Brussels

* UK at loggerheads with EU over budget demand

* Popular (NasdaqGS: BPOP - news) press says UK punished for success

* Row has exposed shift towards Euroscepticism

* Cameron to defend refusal to pay

By Andrew Osborn

LONDON, Oct 27 (Reuters) - The British government defended its refusal to pay a surprise European Union bill of 2.1 billion euros on Monday after Eurosceptic media praised Prime Minister David Cameron for taking what they called a noble stand against money-grabbing "Eurocrats".

An angry Cameron on Friday refused to pay the bill by a Dec. 1 deadline, accusing the EU executive of ambushing him with an unacceptable demand in an appalling way.

The EU demand made it harder to make the case to keep Britain in the bloc before a membership referendum he has promised in 2017 if he is re-elected next year.

The row and the way it has been spun by the popular press and politicians shows Britain's decades-old distrust of the EU, a political shift towards greater Euroscepticism, and the intemperate nature of any debate about Europe in Britain.

It also illustrated how the rise of the anti-EU UK Independence Party (UKIP) has dramatically shifted the political centre of gravity towards Euroscepticism.

Cameron's Conservatives fear UKIP, which wants lower immigration and a British exit for the EU, threatens their re-election chances. It has poached two of Cameron's lawmakers, this month winning its first elected seat in Britain's parliament and is on track to win a second in November.

Britain was hit with the higher bill because its economy has become more successful, something evidenced by data provided by its own Office for National Statistics. Other EU states were clobbered with painful bills too, and in the past Britain has been the beneficiary of such EU budget redistributions.

But much of that nuance has been lost in a public debate where the country's right wing press has cast Britain as being punished by the EU for its rising economy - the fastest-growing in the EU - to pay for the mistakes of two of its oldest historical foes: France and Germany.

"Why should Britain be punished with the shock EU bill for fragile success while France is rewarded with a rebate for abject failure," the best-selling Sun tabloid asked on Monday.

"Why should we make taxpayers borrow 1.7 billion pounds to only to hand it over to feckless bunglers? Eurocrats like Jose Barroso (the outgoing commission president) can strut and bluster about our legal obligations but we have the whip hand."

With many Britons blaming the EU for what they see as unacceptably high levels of immigration from the bloc in recent years, such rhetoric goes down well with many voters, even as, incongruously, opinion polls show support for staying in the EU is at its highest in 23 years.

EUROSCEPTIC SHIFT

On Monday, Cameron's spokesman refused to say whether Britain would even pay a smaller amount of the offending bill, saying the government urgently wanted to understand how its bill and that of others was calculated.

"It's not an acceptable way to behave and it's not an acceptable sum of money," the spokesman said. "There's an important point of process and procedure and there's an important issue of scale."

He rejected out of hand a suggestion from EU Budget Commissioner Jacek Dominik that Britain's cherished EU budget rebate would be at risk if it tried to change the rules in response to the bill.

When asked to confirm that the rebate would not be on the table in talks about the bill, the spokesman simply said: "Yes".

The commission says its demand, though much larger than usual, is routine. Michael Gove, a senior Conservative lawmaker, said on Sunday it looked like deliberate sabotage.

The way the row over the bill suddenly flared up has raised questions about when Cameron and his team first knew about the bill and why they appeared to have been so blindsided.

The opposition Labour party said they should have known months ago. Cameron said he only learnt of it last Thursday.

In the past, Labour and the Liberal Democrats, the junior partner in the country's coalition, have often tried to resist the temptation of portraying clashes between Britain and Brussels in black and white terms.

But this time, with a national election in less than seven months, all three mainstream political parties, including the traditionally pro-EU Liberal Democrats, condemned the EU for presenting Britain with such a bill.

Finance minister George Osborne is expected to discuss the bill with his German counterpart in Berlin later this week and EU finance ministers will broach the matter next week. (Editing by Angus MacSwan)