'Breakthrough' hailed as Brexit talks extended

A statement from Cameron's office late on Sunday said the European Union agreed that Britain could use an "emergency brake" to curb welfare payments to EU migrants immediately.

"On welfare, the Commission have tabled a text making clear that the UK's current circumstances meet the criteria for triggering the emergency brake," said the Downing Street statement, adding. "This is a significant breakthrough."

Top EU officials had on Friday offered Britain the mechanism - known as an "emergency brake" - to allow the UK to temporarily limit tax credits under certain criteria. However, it had remained unclear whether the criteria would be met.

Under the measure, tax credits - given to workers in low-paid jobs - and housing benefit would be limited, with the intention of helping stem immigration from within the EU.

However, Tusk and Cameron agreed to continue talks on Monday, after failing to reach a comprehensive deal on all four areas - also known as "baskets" - for reform.

The European Council president has said he will circulate proposals to other EU countries early this week, if sufficient progress is made.

Crunch summit talks

Britain and the EU had been hoping to reach a deal in February, with the UK set to hold an in-out referendum on UK membership by the end of 2017. An early agreement could see the vote take place as early as July.

Cameron met Jean-Claude Juncker on Thursday, amid a round of meetings with European heads of government ahead of a leaders' summit next month, which is likely to be a make-or-break moment for Cameron's demands.

With a sizable number of British voters opposed to EU membership, Cameron has said some reforms are necessary before he himself could support a "Yes" vote.

Should Cameron win the desired changes at the leaders' summit from February 18 to 19, it is expected he would call the referendum for June this year.

Discord over benefits

Tusk's proposals are expected to clarify the progress made and the work to be carried out ahead of the February leaders' meeting.

Under the British government's proposals, benefits would be denied to workers arriving from other EU countries for up to four years.

Leaders from other EU nations, particularly a number of eastern European states, say that would be discriminatory and threaten freedom of movement within the EU. German politicians, however, have recently considered similar measures, albeit with a shorter period of ineligibility for welfare payments.

A meeting between Cameron and Angela Merkel is planned in Hamburg on February 12.

rc/gsw (AFP, AP, Reuters)