However, leaders say they are hopeful an agreement will be reached in January -- just after Ireland takes up the presidency of the EU. Britain, Sweden, Germany and the Netherlands have all been demanding a widespread slashing of spending up to 2020.
There was no agreement on the revised proposal to reallocate funds, rather than reduce spending.
British prime minister David Cameron was considerably bullish heading into yesterday's meeting when he said that now was not the time for "tinkering". He said that Britain had several allies who are all opposed to the "unaffordable spending" of the EU.
"Frankly, the deal on the table from the president of the European Council was just not good enough," Mr Cameron said
It will now be up to Ireland to try to help find a solution in the new year. Taoiseach Enda Kenny struck an upbeat note about the potential for a deal in January.
"There wasn't a feeling that it should go on today without being able to deal with the details," he said.
"Decisions will be arrived at in January."
And he said that there was no bitterness at the contributions and stances being taken by the differing nations.
European Council president Herman Van Rompuy, who chaired the summit, said that "negotiations are complex and it is worth taking the time to agree a solid deal".
The split appears to remain between those economically strong members, such as Germany, which has fronted the bailout money, and economically weaker ones, like Greece, which are experiencing strict austerity and unemployment.