Cameron is warned key EU reform objective 'may be illegal'

Charles Grant of the CER told BBC Newsnight that restrictions on access to benefits was Downing Street's "most important" demand. "They made that demand as they see it as a more moderate request than their initial idea to have quotas on numerical limits on EU migrants coming into the UK," he said.

"Under pressure from Angela Merkel, the PM backed down on that, and came up with this four year demand instead.

"The trouble is it's illegal because it would discriminate against EU citizens on the basis of their nationality.

"The legal experts say that if you go for, say, a one or two-year residency qualification it's not much better than four years - it still could be seen as discriminatory. However, when you go down to months rather than years it would be much easier to get away with, and I don't think the British would have too much of a problem getting away with that rule".