UK hints at compromise with EU on 'Brexit' demand

David Cameron will hold a referendum on Britain's membership of the bloc by the end of 2017

Britain is willing to listen to alternatives to its demand for limits on EU migrant benefits, foreign minister Philip Hammond said today, apparently opening the door to a compromise on the major hurdle to a deal.

Amid opposition from Britain's 27 European Union partners, British newspapers reported yesterday that Prime Minister David Cameron was ready to drop the demand for a four-year wait before EU migrants who are employed in Britain can claim welfare payments.

Cameron has promised to hold a referendum on Britain's membership of the bloc by the end of 2017. He says he will campaign to stay in the EU only if he gets a reform deal.

Speaking as he arrived for a meeting of EU foreign ministers in Brussels, Hammond denied that Cameron had dropped the plan but admitted that "we've heard that a lot of our partners in Europe have concerns about it."

"So far we haven't heard any counter-proposals, we haven't heard any alternative suggestions that will deliver the same effect in a different way," Hammond said.

"But we've made very clear that if people have other ideas that will deliver on this very important agenda for the British people, we're absolutely prepared to listen to them, and we're prepared to enter into a dialogue with them."

European diplomats told AFP last week that the EU was examining a possible "emergency brake" on migration instead of Cameron's plan.

It would allow Britain to limit migration from the rest of the EU if its public services are overwhelmed or its welfare system is being abused.

Hopes that a deal to avoid a so-called "Brexit" from the EU could be reached at an EU summit this Thursday and Friday were scuppered by what European Council President Donald Tusk called a lack of consensus on the welfare issue.

Other EU leaders say it would violate the EU's fundamental principle of free movement to work.

Tusk said he expected an accord at the next summit in February as there is broad agreement on Cameron's other demands.

They include greater fairness for countries like Britain that do not use the euro currency, an opt-out from the EU's aspiration of "ever closer union" and greater economic competitiveness.