EU leaders regroup in attempt to broker Brexit deal

European Union leaders meet today for a second day of negotiations on Britain's relationship with the EU as disagreements around welfare benefits and economic governance remained unresolved.

David Cameron told his counterparts that they had a chance to end the uncertainty around Britain's relationship with Europe which had "been allowed to fester" for too long.

“If we can reach agreement here that is strong enough to persuade the British people to support UK membership of the EU, then we have an opportunity to settle this issue for a generation,” he said.

As British officials described the talks as “tough going” and negotiators prepared to work through the night in an effort to reach a deal, the deepest divisions surrounded a proposal to index the payment of child benefits for children living abroad, paying them at the rate applicable in their home country. Britain initially sought to limit such payments for all relevant children with immediate effect. The countries of central and eastern Europe, however, insisted that only the children of newly arrived migrants should be affected.

Possible compromise

A possible compromise could see payments indexed immediate for children of new migrants living abroad but phased in for those of migrants already living in the country.

The issue of excluding Irish workers in Britain from any restrictions to benefit payments will not be discussed at the summit and Government sources said there was never any intention to do so.

Britain is sympathetic to the Government’s argument that the unusual position of Irish people in Britain means they could be treated differently from other EU citizens.

Neither British nor Irish officials expect any such arrangement to be negotiated, however, until the details of Britain’s deal are fully worked out.

Senior diplomatic sources suggested that Britain and Ireland may require EU approval for any special arrangement, just as they did for the common travel area when both countries first joined the Common Market.