Malta was expecting "too much" from the EU in the final phase of negotiations, said Eneko Landaburu, European Commission director general for enlargement.

However, speaking in an interview, Mr Landaburu expressed optimism that a compromise would be reached on Malta's requests VAT on foods and pharmaceuticals.

Mr Landaburu, an instrumental figure in the negotiations with the 10 acceding countries, was expressing his views after the Danish presidency of the EU presented its comprehensive package to the candidate countries for the first years of accession.

Presenting Malta's counter-proposal to the Danish foreign minister on Friday, Foreign Minister Joe Borg said the government had put forward a detailed case on the need for the EU to take account of the island's "special circumstances" when compared with other acceding countries.

Mr Landaburu said that although there were still a lot of unresolved issues, he was "fully convinced" an agreement would be reached before the Copenhagen summit on December 12.

He admitted that with just a few days left before the summit, the room for flexibility was now limited.

He said he sympathised with the fact that most candidate countries expected to receive more funding from the EU, even if all would, ultimately, be net beneficiaries. But one had to keep in mind that the majority of member countries were under strong constraints with their own budget.

Asked why finding a suitable financial package for Malta was so problematic, considering the small size of the country, Mr Landaburu said:

"The problem is that we are negotiating with 10 countries and we need to apply the same kind of rules for everybody, otherwise we would be discriminating and creating a lot of difficulties.

"We have succeeded to do this so far, after three years of negotiations. It's wise to keep the balance."

The European Commission had originally offered s7 million a year as aid, a figure described by Prime Minister Eddie Fenech Adami as " a pittance".

Mr Landaburu said the commission was prepared to adopt a certain degree of flexibility, but the same conditions, rights, obligations and tasks had to be applicable to each candidate country.

He said that during his last meeting with Malta's negotiators, the two sides were moving towards a good compromise on specific issues like VAT and agriculture, even if he was fully aware that the adoption of the Common Agricultural Policy in a country like Malta could create some difficulties.

"But this is why in the negotiations we are trying to create some kind of programme for your farmers. Our goal is to maintain the agriculture in Malta and we definitely do not want to eliminate these people who are so important in our culture.

"We spend a lot of money in the union to maintain agriculture. We need to create some mechanism in order to maintain people working in the countryside while still applying the CAP rules. One solution is to have some kind of state aid to help support some activity in order to compensate for the negative effects."

Speaking about Malta's request to retain a zero-VAT rate on foods and pharmaceuticals, as long as Ireland and the UK had the same arrangement, Mr Landaburu said the commission's aim was to have some kind of harmonisation because it was the only way to have a strong economic dimension.

"Your request for a zero-VAT rate is difficult to accept. But a compromise is possible at the end of the day by, maybe, having a reduced rate and an acceptable transition period."

Mr Landaburu said the benchmark for negotiations on the VAT issue was Cyprus, which obtained a five year transition period. But he said that Malta could "perhaps have more".

Asked whether there were any so-called "no-go" areas in Malta's requests, Mr Landaburu said it was difficult to accept a specific protocol for Gozo for the time being.

Mr Landaburu also took exception to accusations levelled by the Opposition that the negotiators were doing what Brussels was ordering them to do:

"I would say it's the contrary. I appreciate the qualities, competencies and professionalism of your negotiators.

"In my view (chief negotiator) Richard Cachia Caruana has put up a tough defence in the interests of your country. He is not an easy man in the negotiations and has definitely not easily accepted our arguments."

Asked whether Malta would benefit more from an alternative route to membership, as being proposed by the Labour Party, Mr Landaburu said he did not want to interfere in the democratic debate.

"All I can say is that the adhesion to the EU is very important to a country. I come from Spain, and when we decided to join the union we decided our future, to consolidate our democracy, to create stability, and it obliged us to become more efficient in managing our economy.

"And after 16 years I can say that this was a good strategic option. The situation now is much better than it was.

"We can have other links and relationships with Europe but it's not the same. Because you cannot be outside and expect to have the same benefits that you have when you are inside.

"It's exactly like a family. In a family you have some constraints. And from time to time, the members are not happy with each other, but you have to understand the benefits of being in this family, you will participate in the love of the family. And you can better defend your specific interest by being inside that family.

"I think we need to think about improving our partnership with third countries, this is a normal task. But a special new association agreement will never be the same as adhesion to the EU."

Asked how he will personally perceive Malta if it opted against membership for a second time:

"It's not easy for a small country to be outside a wide and strong organisation like the EU. And I would be very curious and interested to know what your alternative would then be."