David Cameron has told MPs the UK will not pay the extra £1.7bn demanded by the European Union, promising to challenge it "in every way possible".
The amount is based on a calculation of how well the economies of member states have fared since 1995.
But Mr Cameron said the figure set out, and the 1 December payment deadline set by Brussels, were "unacceptable".
Earlier, a top EU official said it would open a "Pandora's box" if the UK refused to pay.
Labour leader Ed Miliband said the EU's handling of the matter had been "cack-handed", but asked whether the government had exercised "due diligence".
The top-up payment of £1.7bn (2.1bn euros) would add about a fifth to the UK's net EU contribution of £8.6bn for this year.
Mr Cameron, delivering a Commons statement on last week's meeting of EU leaders, said: "Britain will not be paying the 2bn euros to anyone on 1 December and we reject this scale of payment. We will be challenging this in every way possible."
He added: "No one was expecting a change on this scale."
Mr Cameron said it was usual for member states' EU contributions to vary according to economic performance and that this had meant the UK paid less in 2008, 2009, 2011 and 2012.
But it was "simply not acceptable for the EU to make these kinds of demands and to do so in such a fast-track process", adding: "It's not just small change but a vast amount."
At a press briefing in Brussels, the European Commissioner for Budgets, Jacek Dominik, said the UK government had had "two formal possibilities to react" and that "at none of those meetings" had it expressed "any concern".
Mr Dominik said: "We all agree on the methodology and the elements that are included in the contributions and we simply apply them. Never in the past was there a situation that such a decision was changed and implementation regulations have been changed because one of the member states has contested and… it would be extremely difficult to do it."
He added that "if you open this act for future negotiations you open up a Pandora's box".
He warned that, if the money was not paid by 1 December, the European Commission would send the UK government a letter asking for reasons for the delay. There would "be a moment (if no response is delivered) that the Commission will start imposing late… fines".
Mr Miliband told MPs: "The Commission's handling of this matter has been cack-handed and unacceptable and it has caused consternation in a number of other states.
"The urgent priority now is for the government to pursue all diplomatic means to get the best deal for Britain. But the prime minister must also answer whether the government has done due diligence in its handling of this."
The pro-European former Conservative cabinet minister Ken Clarke raised a laugh when he said: "May I first of all sympathise with the prime minister by being taken by surprise on a subject which everybody in the Foreign Office and the Treasury must have known was coming along for the last five months"
Eurosceptic Conservative MP David Nuttall said being in the EU would cost the UK "£44bn net in this parliament alone", adding it was "one reason" people wanted to withdraw.