(Adds formal UK protest to Germany)
By Avril Ormsby
LONDON, Dec 12 (Reuters) - Europe is committed to providing a fiscal stimulus to tackle the financial crisis, Britain's Foreign Minister David Miliband said on Friday, dismissing a recent spat with Germany.
Berlin and London have become embroiled in a diplomatic row over the need to use debt-funded tax cuts and spending increases to ease the effects of the economic downturn.
Peer Steinbrueck, Social Democrat finance minister in Germany's conservative-led coalition government, was quoted in Newsweek as saying Britain was adopting untested policies that could saddle it with debt that would take a generation to clear.
A British government spokesman said the country's ambassador called Germany's finance ministry on Thursday to challenge the comments.
The formal protest evoked memories of 1992 when Britain criticised comments from the then Bundesbank president for precipitating sterling's ejection from the Exchange Rate Mechanism. Steinbrueck's comments were followed by similarly critical remarks by an economic adviser to German Chancellor Angela Merkel in the media on Friday.
"The tremendous amount of debt being offered by Britain shows a complete failure of Labour policy," Steffen Kampeter was quoted as saying.
Germany has come under pressure by other major European nations for apparently dragging its heels during the crisis.
But Miliband said there was a strong pan-European commitment to a fiscal stimulus being discussed by European leaders at a summit in Brussels.
"What you will see is, from Mrs Merkel as well as from Gordon Brown, a very clear statement at the end of this council setting out their support for a European recovery package which includes a strong fiscal stimulus which is being supported right across Europe," he told BBC radio.
Miliband blamed German internal politics for the criticisms.
"What you have got is clearly internal politics in Germany ... you have got elections next year." (Editing by Louise Ireland)