Cameron was responding to growing calls from his Conservative party and the media for action to manage the expected influx of Bulgarian and Romanians when restrictions on their working rights across the EU are lifted on January 1.
"I know many people are deeply concerned about the impact that could have on our country. I share those concerns," he wrote in an article in the Financial Times.
But European employment commissioner Laszlo Andor accused Cameron of an "unfortunate over-reaction", saying Britain risked becoming seen as the "nasty country" of the EU.
When Romania and Bulgaria joined in 2007, restrictions were imposed which are only now coming to an end.
Addressing fears of a new wave of arrivals, Cameron said no EU migrants would receive unemployment benefits for the first three months after they arrive in Britain - up from one month currently - and then only for six months.
Migrants found to be begging or homeless will also be removed and barred from re-entering Britain for a year, as ministers seek to clamp down on so-called "benefit tourism".
Cameron admitted he did not know how many people the measures would affect, but said: "It's about sending a signal."
He proposed countries joining the bloc in the future be required to reach a certain level of GDP per head before their citizens are allowed to work elsewhere in the EU, to stop "vast migrations" caused by income disparity.
"It is time for a settlement which recognises that free movement is a central principle of the EU, but it cannot be a completely unqualified one," he wrote.
The EU's Andor warned the prime minister against any action which could undermine the single market, saying that interfering with the rules was a "slippery slope".
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