LUXEMBOURG -- France stood defiant against its 11 euro-zone partners in refusing late Monday to begin balancing its budget from next year, cementing its position as the black sheep of the common currency zone.

Finance ministers from the other euro nations, including three countries which along with France are running worryingly high public deficits -- Italy, Germany and Portugal -- agreed at marathon talks to cut their cyclically adjusted shortfalls by at least 0.5 percent a year from 2003.

France, however, stuck to its guns in reserving the right to do nothing to mend its finances pending a recovery in economic growth, AFP reported.

The refusal to toe the line is bound to inflame criticism from other European Union members that France is thumbing its nose at the drive to redress persistent deficits which observers say undermine the euro's credibility.

French Finance Minister Francis Mer, however, insisted that France had pressing spending priorities such as boosting its defense budget.

"We are not alone among 12," he told reporters, despite his lone stand, after the talks ended well beyond midnight.

Mer said France remained committed to the broader goals set out in the euro zone's stability and growth pact, including keeping its public deficit under 3.0 percent of gross domestic product and eventually bringing it toward balance. "We will do what we can (to cut the deficit), knowing that we are committed to this depending on the pace of growth," he said. "If the situation becomes better than foreseen, we will proceed more quickly in the reduction."

The talks left another bone of contention -- a mooted two-year delay in the deadline of 2004 for euro members to balance their books -- up in the air.

EU Economic and Monetary Affairs Commissioner Pedro Solbes, whose suggestion that the deadline be put back to 2006 had met with a storm of criticism from smaller EU members, said the later date "has not been agreed".

Greek Finance Minister Nicos Christodoulakis said "2004 remains the basis of our reference unless it is substantially changed by our assessment of the economic cycle", suggesting a fudge on when exactly euro participants will be required to balance their books.

France, Germany, Italy and Portugal are all almost certain to miss the original date of 2004.

"All the ministers with one exception agree that this (deficit cutting) will start in 2003," Christodoulakis told a press conference.

The ministers agreed with the European Commission that countries which have yet to balance their budgets "should follow a continuous program of adjustments of at least 0.5 percent", Christodoulakis, the euro-zone president, said.