By Francesco Guarascio

BRUSSELS (Reuters) - The European Parliament will seek to amend an annual budget package agreed by EU member states and in particular wants to limit cuts to research and foreign aid spending, lawmakers said on Tuesday.

The 28 EU states agreed on Monday on a 2017 budget that would be 7 percent smaller than this year's, including 133.8 billion euros in payments. The deal reached by the Council of EU states would cut more than 820 million euros from an initial proposal made by the European Commission, the executive arm of the union.

But the European Parliament, which shares with the Council the power to amend the EU budget put forward by the Commission, sees the proposed cuts as excessive and counterproductive.

In the words of the head of the conservative group, the largest in the Parliament, the proposals were "dishonest" and "unacceptable".

"The Council proposal was unacceptable. It seems to be a provocation to me," Manfred Weber told a news conference in Strasbourg, replying to questions on the EU budget.

The EU governments agreed to cuts in spending on research and foreign policy and in funds for the bloc's poorer regions, mostly Eastern European countries, and accepted an increase in the budget for migration and job creation.

Weber expressed anger about the cuts in research and foreign aid. He said that this contradicted EU states' plans to create more jobs because employment is often the result of innovation and research.

Cutting aid to foreign countries that are often the origin of migrants also contradicts the stated target to do more on migration, Weber said.

After the Parliament agrees its position, it negotiates with the Council on a possible compromise. For the budget to be fully operational by the beginning of next year, the EU institutions must reach a deal by mid-November.

Weber's views appear to reflect a broad informal agreement reached by the main groups in the European Parliament.

The legislature "deplores that the Council's cuts affect a number of programs that represent political priorities commonly agreed between Council and Parliament for the EU as a whole," Jens Geier, the German Social Democrat steering the budget proposal through Parliament, said in a draft proposal.

The document, which is likely to be adopted by the assembly without major changes by the end of October, is particularly critical of cuts proposed by the Council on research and infrastructure projects.

Planned cuts on funds to poorer regions, as proposed by the Commission and broadly agreed by EU states, do not appear as a crucially controversial issue.

Eastern European states have already accepted next year's cuts, partly due to regular delays in the launch of regional projects. But they strongly oppose a structural, long-term reduction in so-called cohesion funds that they fear the Commission may propose this week, diplomats said.

(Additional reporting by Alastair Macdonald in Strasbourg; Editing by Hugh Lawson)