David Cameron has rejected the latest proposals from Brussels on his reform agenda as "not good enough" after talks with senior European Union figures over the offer of an "emergency brake" on migrant benefits.
The Prime Minister said the proposal "needs more work" but insisted progress was being made ahead of a crunch summit of EU leaders in February.
It is thought that the proposed mechanism would be available to all EU states, and be activated when migration levels were deemed high enough to put public services or welfare systems under severe strain.
Migrants from the EU would then be barred from claiming in-work benefits for up to four years.
Crucially, it is believed that the decision on triggering the brake would be in the hands of national governments rather than EU officials.
Mr Cameron, who held talks with European Commission president Jean-Claude Juncker and European Parliament president Martin Schulz in Brussels, said: "We want to end the idea of something for nothing - people said that was impossible.
"There is now a proposal on the table, it is not good enough, it needs more work but we are making progress."