EU referendum: David Cameron 'close' to deal curbing new worker benefits

David Cameron is reportedly getting close to an agreement with the European Union that would allow Britain to deny benefits to new workers arriving from other EU countries for up to four years.

The proposal would mean that if a country could convince Brussels its welfare system was under strain, it could deny the benefits to new workers, a key plank of Cameron's demands for a different relationship with the EU.

This could offer Cameron the chance to present a strong renegotiated EU relationship to campaign on when the UK goes to a referendum later this year to vote on membership of the union.

Reuters reported a source close to the negotiations as saying that the UK could initiate an "emergency brake" on the payments.

The source said Cameron was keen to have a European Commission proposal issued before the referendum, to demonstrate an urgency to voters for whom immigration is a priority issue.

"They're looking for something that will be usable quickly," this source said. "They'd like to claim what has happened already justifies taking emergency measures. They would like to paint the situation as already dramatic. The devil is in the detail," Reuters reported.

One Tory source who is familiar with the negotiations told the Guardian there are signs of progress, pointing out: "The balance has swung a bit to looking more positive than negative whereas a moment ago it was more negative than positive. The mood music seems to have changed a bit."

Cameron will discuss the issues with the presidents of the European Commission on Friday (29 January).

Cameron would still need to persuade EU leaders that a wave of labour migration to Britain over the last 12 years justified applying the emergency brake. The proposal would not affect Poles, Romanians and others already working in Britain.

Time is running out with European Council president Donald Tusk expected to circulate a text on Tuesday (2 February) to all EU governments outlining the deal and giving government experts time to study the detail ahead of the summit.

Any potential deal would still have to be agreed by all EU leaders at a summit in February.